Credit Suisse takes $54bn loan from Swiss central bank after share price plunge

theguardian.com:

Credit Suisse has announced that it will take a CHF50bn ($53.7bn) loan from the Swiss central bank, in an action it says will “pre-emptively strengthen its liquidity” as it moves to stem a crisis of confidence a day after its share price plummeted.

This additional liquidity would support the bank in taking the “necessary steps to create a simpler and more focused bank built around client needs”, its statement said. The bank said it was also making buyback offers on about $3bn worth of debt.

The bank said its borrowing measures “demonstrate decisive action to strengthen Credit Suisse as we continue our strategic transformation to deliver value to our clients and other stakeholders”.

Asian stocks slid on Thursday and investors turned to the safety of gold, bonds and dollars as fears of a broader crisis intensified despite the intervention, leaving markets on edge ahead of a European Central Bank meeting (ECB) later on Thursday.

Expectations of a 50 basis-point rate rise in Europe have evaporated as markets radically rethink the global interest rate outlook. Money market pricing implies a less than a 20% chance of such a rise from the ECB, down from 90% a day earlier.

The move to shore up Credit Suisse’s finances came a few hours after the central bank and the Swiss financial markets regulator issued a joint statement pledging emergency funding if needed. They insisted there was no “direct risk” of contagion from turmoil in the US banking system after the sudden collapse last week of the US lender Silicon Valley Bank.

“Credit Suisse meets the capital and liquidity requirements imposed on systemically important banks,” the Swiss National Bank said. Credit Suisse is one of 30 banks globally deemed too big to fail, forcing it to set