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HomeTop Global NewsIndustriesCredit Suisse shares hits all time low, company at crisis!

Credit Suisse shares hits all time low, company at crisis!

After the bankruptcies of SVB and Signature Bank on back-to-back days in the US. There are now even greater concerns about the possibility of a third collapse. The second-largest bank in Switzerland and the eighth-largest investment bank globally, Credit Suisse, has recently faced significant difficulties.

Credit Suisse was found guilty by Switzerland’s Federal Criminal Court of failing to stop money laundering by a Bulgarian cocaine trafficking group. It was later fined $2.1 million in a cocaine cash laundering case. And the mess just continued to worsen. Earlier this year, Credit Suisse announced significant layoffs and experienced its largest yearly loss since the 2008 financial crisis.

Just a few days ago, a prominent investor in the troubled Swiss bank Credit Suisse indicated he would be unable to supply any additional capital due to legal limitations. Further causing the shares to drop to a new record low. The bank’s shares somewhat recovered after it announced it would borrow up to $54 billion from the Swiss central bank. The same is in order to boost liquidity and investor confidence. It is after a decline in its shares heightened concerns about a potential global financial catastrophe.

Here are a few things which led to Credit Suisse’s Crisis:

According to a Reuter’s investigation, the mess that the 167-year-old Swiss institution Credit Suisse is currently in can be attributed to a number of scandals. The same span several years, top management changes, multi-billion dollar losses, and an uninteresting strategy.

Losses resulting from the demise of investment funds Archegos and Greensill Capital started the sell-off in Credit Suisse’s shares in 2021.

In January 2022, only eight months after being hired to turn around the failing bank, Antonio Horta-Osorio resigned. Due to a COVID-19 regulation violation. Ulrich Koerner, a new CEO and restructuring expert, released a strategic assessment in July of last year. However, it was not well received by investors.

What is the company doing to recover?

In order to support liquidity and market confidence, Credit Suisse has previously stated that it would borrow up to $54 billion. But, some analysts believe that this amount won’t be sufficient to calm investors. One way to support market confidence might be to win the support of key investors. According to reports, Oyalan Group in Saudi Arabia and the Qatar Investment Authority are among the investors in Credit Suisse.

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