Accessing Billions for Liquidity Protection
According to Finance Minister Karin Keller-Sutter, Credit Suisse recently tapped the Swiss National Bank (SNB) for a large multi-billion amount to secure its liquidity. The Swiss bank had previously announced intentions to borrow up to 50 billion Swiss francs from the SNB to improve liquidity.
Reasons for Liquidity Withdrawal
Keller-Sutter explained that the withdrawal was due to customers pulling out funds and counterparties demanding guarantees for business transactions with Credit Suisse. The figure is assumed to exceed 50 billion Swiss francs, though the exact number is known only to the SNB.
Stabilized Situation and UBS Merger
The finance minister emphasized the importance of stabilizing the situation, which has been achieved. Last Sunday, UBS agreed to acquire its rival Credit Suisse for 3 billion Swiss francs in stock and take on up to 5 billion francs in losses as part of a merger orchestrated by Swiss authorities to prevent further market turmoil in global banking.
