Credit Suisse: What Happened?
Here’s the short and simple version of why investors are worried about Credit Suisse.
First, it starts from the fact that U.S. regional banks are all in disarray right now. What do Credit Suisse’s problems have to do with the problems at U.S. regional banks? Absolutely nothing, but investment panic and fear are rarely rational.
Credit Suisse is a BIG European bank, not a small U.S. bank, so it’s subject to MUCH stricter standards. That means its balance sheet has to go through additional stress tests, and unlike the U.S. banks that are in trouble right now, its bond holdings are all hedged to protect against rising rates.
Don’t get me wrong, Credit Suisse DEFINITELY has issues, but they’re just WAY different and they’ve been WIDELY known for a long time.
YEARS of sub-par investment results, capped off by 2 high-profile business failures in 2021 have put them in restructuring mode for the past 2 years.
Nothing is really NEW, it’s just, kind of, guilt by association, but now that the Swiss National Bank stepped in to give their support, it’s actually one of the STRONGEST banks in Europe!
This feels like CLASSIC panic selling to me.
#creditsuisse #bankingcrisis #fundamentalsoffinance


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