Credit Suisse is a systemic bank, meaning it is part of a country or group of institutions of great importance to the international financial system. That’s why the authorities suggested a quick fix for the Swiss presence to prevent widespread contamination. An example is Silicon Valley Bank (SVB) and Signature Bank The US, whose unsystematic declines are already causing real earthquakes in the markets.
What are systemic banks?
What is considered necessary for them national or global stability. Its problems or decline will affect a country’s entire financial system or internationally because of its links to the whole. Every November, financial stability council (FSB) and Basel Committee They publish a list of 30 banks with these features. Credit Suisse one of them, along with the other Swiss group, UBS. In the 2022 ranking, there was only one Spanish bank on the list, Santander. There are actually two degrees: global systemically important organizations (EISM) and national systemically important organizations (OEIS), established by the financial authorities of countries. In Spain at the national level, in addition to Santander, BBVA, CaixaBank after being accepted by Bankia; sabadell, With capital buffers of 1%, 0.75%, 0.50% and 0.25% in 2023.
What does it mean to be such a being?
Banks that are considered systemic, both globally and nationally, are subject to capital buffers in addition to those of other institutions. They are considered to be too big banks to fail (‘Too big to make mistakes’). As a result, it is foreseen in extreme cases. able to save and protect them To avoid major financial and economic collapses. The greater the systemic risk, the higher the additional capital requirement. Credit Suisse was included in the group of organizations that require 1% additional capital, such as UBS or Santander, in the November 2022 final list. For example, another group they belong to Deutsche Bank, Barclays, BNP Paribas or Goldman Sachs, 1.5% is required, among others. They must comply with 2% Bank of America, Citigroup or HSBC. with 2.5% J.P. Morgan Chase; there is no one in the group where the highest risk level of 3.5% is required.
What is the purpose of these regulations?
After that 2008 financial crisisThe establishment of the largest since 1929 proved necessary. some form of control over assetsthat is, if they experience a problem, they will be able to drag the entire national or international sector. In this context, the systemic bank seal has emerged and the list has been organized since 2011. The purpose of these regulations is to reduce the likelihood of bankruptcy of such organizations and reduce the scope and impact through the improvement of recovery and resolution systems, that is, duly liquidation and without the need for public support.
What’s going on at Credit Suisse?
Credit Suisse, one of the two largest banks in Switzerland with a history of 167 years, is part of the list of systemic institutions worldwide. After the fall of American Silicon Valley Bank and Signture Bank, doubts returned to feed this bank. in view collapse of the action and loss of customersThe Swiss National Bank has approved an injection of 50,000m euros in liquidity into the business, a measure that was well received but proved insufficient. The business has been affected by the loss of high net worth customers and mismanagement fraught with fines and scandals. suffered last year More than 7,000 million euros lost.