why we need recapitalization (or a buyer) - Corriere.it

why we need recapitalization (or a buyer) - Corriere.it

The availability of credit financing of up to 50 billion Swiss francs (50.7 billion euros), disclosed in the night between Wednesday and Thursday, has not solved the problems of Credit Suisse. He couldn't do it: at best it was necessary to allow the second largest Swiss bank to gain a few days of time, in view of a solution that would stem the crisis of confidence that surrounds it.

Credit Suisse: liquidity is not enough

Because Credit Suisse doesn't just need liquidity: it needs a balance sheet cleanup and a recapitalization, in the form of a subscription for new shares or a sale - in whole or in parts - to other competing banks. The 50 billion loans announced last night were mostly a big plaster which blocked the rush of bank customers to withdraw deposits, savings under management or other relationships. But the crisis of confidence remains and it can be seen today, in which Credit Suisse has lost up to about 11% on the stock market. clear that the countdown for the institution has not stopped and the search for a solution that strengthens the capital remains urgent.

What happens now

Not a small game, because the Swiss budget is worth about 500 billion dollars. The path that seems most probable today is that of a piecemeal sale. Ubs would be far from enthusiastic but is receiving pressure to be in the game probably to take over the retail client business and asset management in Switzerland. Instead, it is much more difficult to find buyers interested in the investment banking part based above all in London and New York. from which most of the losses of the last fiscal years seem to come. And given the instability of the situation, if the conditions are created, it is possible that an agreement to save Credit Suisse's business will come quickly.

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