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Swiss Government and Credit Suisse Discuss Stabilization Measures

According to a Bloomberg report, Swiss authorities are in talks with Credit Suisse Group AG to discuss various options for stabilizing the bank. Credit Suisse and government officials have been considering measures that range from a public statement of support to a potential liquidity backstop.

Credit Suisse Bank
Credit Suisse Bank

Possible Moves for Credit Suisse's Future

The report also suggested that other potential moves for Credit Suisse could include separating their Swiss unit and a possible merger with their larger Swiss competitor, UBS Group AG. However, it remains to be seen which of these steps, if any, will be implemented.

Pressure on Switzerland to Act Quickly

A source told Reuters that Switzerland is facing pressure from at least one major government to intervene quickly in Credit Suisse's situation. This comes after the Swiss bank led a rout of European bank stocks, with Credit Suisse shares dropping by as much as 30.8%.

Credit Suisse's Impact on European Banking Index

The significant drop in Credit Suisse shares resulted in a 7% fall in the European banking index SX7P. Additionally, five-year credit default swaps (CDS) for the flagship Swiss bank reached a new record high, raising concerns about a broader threat to the financial system.