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Unlike 2008, Credit Suisse and SBV haven’t been saved by governments. But let’s not make ‘bailout’ a dirty word
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B anks are a special type of organisation. They take deposits and lend these funds to borrowers over long periods. It is pretty remarkable when you think about it.
Banks make loans over many years, but you and I can withdraw the savings that banks use to fund the loans instantly.For banks to operate this franchise model profitably, they essentially rely on two ingredients.
First, they need to earn a profit by charging higher interest on long-term loans than they pay on short-term deposits. This model has come under severe strain in recent years.
Owing to high inflation now and lower expected inflation in the next few years, many banks currently pay more for deposits and other funds than they earn on long-term loans and other assets.
Read more on theguardian.comAbout this in other media
UBS Group doubles offer and acquires Credit Suisse for $2B cointelegraph.com /12 hours ago
UBS agrees to buy Credit Suisse as regulators look to shore up global banking system cnbc.com /14 hours ago
Credit Suisse rescue plan may include nationalization, bondholder losses cointelegraph.com /16 hours ago
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