Credit Suisse (now UBS) on borrowed time?

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Deutsche Bank shares fell by more than 11% on Friday following a spike in credit default swaps Thursday night, as concerns about the stability of European banks persisted.

The German lender's Frankfurt-listed shares retreated for a third consecutive day and have now lost more than a fifth of their value so far this month. Credit default swaps — a form of insurance for a company's bondholders against its default — leapt to 173 basis points Thursday night from 142 basis points the previous day.
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www.cnbc.com

Deutsche Bank shares slide 11% after sudden spike in the cost of insuring against its default

Deutsche Bank shares fell 11% on Friday after a spike in credit default swaps on Thursday night, as concerns about the stability of Europe's banks persisted.
www.cnbc.com www.cnbc.com
 
These guys cover the sale and cost and issues surrounding

Forcing UBS to swallow Credit Suisse​

 
...
The bank notoriously pleaded guilty in 2014 to criminal charges for "knowingly and willfully" helping thousands of U.S. clients conceal their offshore assets and income from the IRS. It admitted at the time that it used sham entities, destroyed account records, and hand delivered cash to American clients to avert IRS detection — agreeing to crack down on U.S. tax dodgers going forward as part of its plea deal. Credit Suisse also agreed at the time to a host of reforms, including disclosing its cross-border activities and cooperating with authorities when they request information, among other things.

The now troubled bank appears to have violated that agreement, according to a new report by the Senate Finance Committee that details ongoing and rampant abuse since then. The report, released Wednesday, details the findings of the panel's two-year investigation and takes on more urgency given the looming banking crisis. ...
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www.cnbc.com

Credit Suisse whistleblowers say Swiss bank has been helping wealthy Americans dodge U.S. taxes for years

The bank notoriously pleaded guilty in 2014 to criminal charges for "knowingly and willfully" helping U.S. clients hide offshore assets and income from the IRS.
www.cnbc.com www.cnbc.com

Will there be any political pressure on the Fed to punish CS?
 
searcher said:
finance.yahoo.com

How Credit Suisse lured – and then burned – the Saudi crown prince

When Credit Suisse opened its first office in Saudi Arabia in early 2021, Bruno Daher, the cigar-smoking head of Credit Suisse’s Middle East business, declared it a “key growth market”.
finance.yahoo.com finance.yahoo.com
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Saudi's have a way of taking care of business.

Last time I remember they took one prince for a helicopter ride 300 miles out in the desert and dropped him off with a bottle of water.
 
buckle up folks!

THE AMC SWAPS DESTROYED CREDIT SUISSE!! - AMC Stock Short Squeeze Update​

The AMC and Gamestop Swaps DESTROYED Credit Suisse. This is because they inherited the swaps from Archegos and inherited the massive unrealised losses, therefore to negate their losses, they SOLD put options to other hedgies hoping the price would go up and squeeze.

That way Credit Suisse would make tons from the premiums during the squeeze, negating the losses and closing out of their positions.

But because the squeeze didn't happen in June 2021, the losses on their sold puts ate away at the bank further and further until the bank went under.
10m
 
The Derivatives market are the TAIL that is wagging our entire economy. It's just massive and virtually Impossible to know exactly what is happening. Even the parties to the agreements have no clue after some time what they really have. It's a mess.
 
Goldhedge said:
buckle up folks!

THE AMC SWAPS DESTROYED CREDIT SUISSE!! - AMC Stock Short Squeeze Update​

The AMC and Gamestop Swaps DESTROYED Credit Suisse. This is because they inherited the swaps from Archegos and inherited the massive unrealised losses, therefore to negate their losses, they SOLD put options to other hedgies hoping the price would go up and squeeze.

That way Credit Suisse would make tons from the premiums during the squeeze, negating the losses and closing out of their positions.

But because the squeeze didn't happen in June 2021, the losses on their sold puts ate away at the bank further and further until the bank went under.
10m
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Iffn you watched the video...

at the 2:30 mark he plays a short piece from The Big Short that pretty much explains how the market works.
 
Goldhedge said:
Iffn you watched the video...

at the 2:30 mark he plays a short piece from The Big Short that pretty much explains how the market works.
Click to expand...

Lynette Zang said in one of her recent videos just how big the market is. AND the system was Hacked and so they can't even clear trades or see what "prices" of the trades have been. She has no idea what the total size is and they even just "compressed" the total notional value back after 2008. It's crazy.
 
Credit Suisse reported Monday that clients had withdrawn 61.2 billion francs ($69 billion) in the first quarter and that outflows were continuing, highlighting the challenge faced by UBS in rescuing its rival in March.

In the last financial statement as an independent company, Credit Suisse reported a loss of 1.3 billion Swiss francs ($1.46 billion) for the first three months of the year. It said "significant net asset outflows" were seen in March.

Most asset outflows originated from its wealth management unit and occurred in all regions. The troubled bank said, "These outflows have moderated but have not yet reversed as of April 24, 2023."

Credit Suisse's wealth management unit lost 9% of assets in the first quarter. ...
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"Magnitude Of Losses And Outflows Is Alarming:" Credit Suisse Hemorrhages $69 Billion In Assets | ZeroHedge

ZeroHedge - On a long enough timeline, the survival rate for everyone drops to zero
www.zerohedge.com www.zerohedge.com

I think you would have to have your head in a snowdrift in order to not be pulling funds out of CS by now.
 
  • Problem debt dates back 15 years to financial crash
  • UBS expects to close C. Suisse deal by 2Q, possibly May
  • CEO warns of 'hard' task of integrating Credit Suisse


ZURICH, April 25 (Reuters) - UBS (UBSG.S) said on Tuesday it had set aside more money to draw a line under its involvement in toxic U.S. mortgages, halving its first-quarter profit as the bank girds itself for the "hard" task of swallowing fallen rival Credit Suisse (CSGN.S).

Sergio Ermotti, brought back as UBS chief executive to steer the takeover, said it aims to close the deal with fellow Zurich-based bank Credit Suisse by May but warned that it could take four years for a full integration.

www.reuters.com

UBS hit by old toxic debt costs ahead of 'hard' Credit Suisse task

UBS said on Tuesday it had set aside more money to draw a line under its involvement in toxic U.S. mortgages, halving its first-quarter profit as the bank girds itself for the "hard" task of swallowing fallen rival Credit Suisse .
www.reuters.com www.reuters.com
 
From the link:

(Bloomberg) -- The world’s biggest ocean friendly debt swap is coming together in Ecuador, with Credit Suisse Group AG offering a yield of less than 6% on a new bond, according to people familiar with the matter.

finance.yahoo.com

World’s Biggest Blue-Bond Swap Emerges to Protect the Galapagos

(Bloomberg) -- The world’s biggest ocean friendly debt swap is coming together in Ecuador, with Credit Suisse Group AG offering a yield of less than 6% on a new bond, according to people familiar with the matter. Most Read from BloombergTexas Mass Shooting’s Bloody Images Add to Fervor in Gun...
finance.yahoo.com finance.yahoo.com
 
  • Credit Suisse will be merged into UBS after deal's completion
  • New group will oversee $5 trillion in assets
  • UBS CEO has warned of painful decisions ahead
  • UBS CEO: still analysing plan for Credit Suisse domestic business
  • UBS shares indicated slightly higher in premarket
www.reuters.com

UBS expects to seal Credit Suisse takeover as early as June 12

UBS expects to complete its takeover of Credit Suisse "as early as June 12", which will create a giant Swiss bank with a balance sheet of $1.6 trillion following a government-backed rescue earlier this year.
www.reuters.com www.reuters.com
 
Is it time to start the "UBS on borrowed time?" thread yet?
 
... the Swiss Parliamentary Commission of Inquiry that is delving into the collapse in March of the second largest global bank in Switzerland – Credit Suisse. ... has announced that it plans to lock away the details of its findings for 50 years. (UBS, the largest global bank in Switzerland, bought the crumbling remains of Credit Suisse earlier this year.)

Reuters reported that the Swiss Parliamentary Commission of Inquiry is also requiring that “All persons participating in the meetings and the questioning are subject to the duty of secrecy, not only the members of the commission, but also the interviewees themselves.” ...
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Swiss Government Plans to Lock Away Secrets on Credit Suisse Collapse for 50 Years

By Pam Martens and Russ Martens: July 18, 2023 ~ The “Deep State” is increasingly feeling like the “Deep Banking State.” Try to get any meaningful
wallstreetonparade.com
 
pmbug said:
Is it time to start the "UBS on borrowed time?" thread yet?
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No, not yet...

...
A Reuters poll of analysts had initially projected a net profit of $12.8 billion for the three months to the end of June. UBS smashed that with a record profit of $28.9 billion in the second quarter, thanks to $28.9 billion of negative goodwill associated with the Credit Suisse acquisition. This was possible by the accounting difference between the $3.8 billion price UBS paid for Credit Suisse and the value of the acquired lender's balance sheet. The bank expects Credit Suisse's local unit will be fully absorbed into the parent company by 2025.
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Ermotti said, "We will have around 3,000 jobs that will be made redundant over the next years." This is the first time the CEO has put solid numbers on how many jobs will be axed due to the merger of the banks. UBS' acquisition of the 167-year-old institution increased its workforce by 45,000 to 120,000. Thousands of jobs are considered "redundant" and are on the chopping block.

Ermotti told CNBC's Joumanna Bercetche:
"When people look into those numbers, they will clearly understand that this negative goodwill is the equity necessary to sustain $240 billion of risk-weighted assets and the financial resources to go through a deep restructuring that is necessary at Credit Suisse, because our analysis has proven that the business model was not viable any longer."
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He continued:
"Credit Suisse has excellent people, clients, and product capabilities, but the business model was not sustainable any longer and needs to be restructured."
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UBS Soars To 2008 Highs After Biggest-Ever Quarterly Profit For A Bank, Job Cut Announcement | ZeroHedge

ZeroHedge - On a long enough timeline, the survival rate for everyone drops to zero
www.zerohedge.com www.zerohedge.com

I'm assuming that ZH made a typo with the second mention of $28.9B, but it's clear that UBS was gifted in the neighborhood of $13B of Credit Suisse assets.
 
Hmmm....

A popular initiative in Switzerland wants to hold a vote on partially nationalizing UBS Group AG, the initiators wrote on their website.

The so-called banks initiative proposes to amend the Swiss constitution to say that “large banks of systemic importance are to be managed as joint stock companies with the confederation as majority shareholder in terms of share capital,” according to the website.

The text is currently under review by federal authorities. If they greenlight it, the initiators have 18 months to collect 100,000 signatures for their cause. Parliament and cabinet ministers would then need to weigh in before the issue could be put to a national vote, a process that would likely take several years.
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www.swissinfo.ch

Swiss Propose Vote on Plan to Nationalize UBS - SWI swissinfo.ch

(Bloomberg) — A popular initiative in Switzerland wants to hold a vote on partially nationalizing UBS Group AG, the initiators wrote on their website. The so-called banks initiative proposes to amend the Swiss constitution to say that “large banks of systemic importance are to be managed as...
www.swissinfo.ch www.swissinfo.ch

I believe that this is the initiative's website:

Home | Bankeninitiative

www.bankeninitiative.ch www.bankeninitiative.ch

Too bad @swissaustrian isn't around these days...
 
The crisis at Credit Suisse has opened up a broad debate on the financial stability framework in Switzerland. The National Bank Act states that the Swiss National Bank shall contribute to the stability of the financial system, and legislators have allocated certain tasks and instruments for this purpose. In the event of a crisis, the SNB performs this mandate in particular by acting as lender of last resort and providing liquidity to systemically important domestic banks that are solvent but can no longer refinance themselves on the market. In March 2023, the crisis at Credit Suisse placed heavy demands on the SNB in its role as lender of last resort. By making liquidity assistance available on an unprecedented scale, the SNB first created the time window necessary to find a solution for Credit Suisse, and thereafter provided significant support in the acquisition of Credit Suisse by UBS.

The acquisition of Credit Suisse by UBS on 19 March this year prevented a global financial crisis. ...
...
What lessons have been learned from this crisis with regard to the provision of emergency liquidity? The case of Credit Suisse has clearly shown that outflows of customer deposits can now be much faster and more extensive than assumed by the existing regulations. Moreover, Credit Suisse had not prepared sufficient assets that it could provide to the SNB as collateral in order to access massive amounts of emergency liquidity assistance in a crisis. That is why emergency law had to be used to make ELA+ possible.

The following lessons can be learned from this: First, the liquidity regulations must be geared to the new reality of potentially faster and larger outflows of deposits. Second, it is of the utmost importance going forward that banks prepare sufficient collateral that they can transfer to the SNB and other central banks. Third, there needs to be an effective PLB that enables the SNB to provide liquidity loans to banks in difficulties that do not have sufficient collateral. The risks of the PLB are borne by the state. This approach tallies with the established allocation of roles between state and central bank in a banking crisis. ELA+ should not become part of the SNB's regular set of instruments.
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www.bis.org

Thomas Jordan: The Swiss National Bank's role as lender of last resort in the crisis at Credit Suisse

Summary of the keynote speech by Mr Thomas Jordan, Chairman of the Governing Board of the Swiss National Bank, at the conference "The SNB and its Watchers", Berne, 1 November 2023.
www.bis.org www.bis.org

SNB = Swiss National Bank
PLB = Public Liquidity Backstop

SNB says they want government to shoulder a publicly financed bail out program for banks so they don't have to do the heavy lifting in the future....
 
UBS Bank Branch in Basel Switzerland DENYING Withdrawals - "Liquidity Challenges"
A branch of UBS Bank, located at Tellplatz 12, Basel, Switzerland, gave a written notice to a Depositor today explaining why they CANNOT GIVE HIM HIS WITHDRAWAL: "Liquidity Challenge."

Yes, you read that right: The largest Bank in Switzerland told a Depositor IN WRITING, they cannot give him his withdrawal due to "Unforeseen liquidity challenges."
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halturnerradioshow.com

UBS Bank Branch in Basel Switzerland DENYING Withdrawals - "Liquidity Challenges"

A branch of UBS Bank, located at Tellplatz 12, Basel, Switzerland, gave a written notice to a Depositor today explaining why they CANNOT GIVE HIM...
halturnerradioshow.com halturnerradioshow.com
 
pmbug said:
Hmmm...

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Gee what happened back in Jan - March of 2021? Gamestop happened. The entire economy/banking/stock market was a scam and its coming to an end.

I do believe that the guy above and AMC was one of their counters and is actually run by the bad guys. I could be wrong but I'm pretty much out of that one. Never did like the movie business either.
 
And I still am of the opinion that Bed Bath and Beyond was used as the fuse to the whole Swap/Derivatives Debt bomb. It's been one damn long fuse but the bigger the explosion the longer the fuse you need.
 

How Swiss authorities bungled Credit Suisse oversight​

  • Central bank wanted to nationalise Credit Suisse in autumn 2022
  • Differences among authorities undermined ability to oversee bank
  • Credit Suisse imploded in March 2023 and was sold to UBS
Dec 18 (Reuters) - About six months before Credit Suisse was sold to rival UBS in a weekend rescue, the head of the Swiss central bank wanted to inject 50 billion Swiss francs ($57.6 billion) into the lender and nationalise it, according to three sources with direct knowledge of the matter.

Hobbled by a series of scandals and failed restructuring plans under successive management teams, Credit Suisse had experienced massive deposit outflows in October 2022. Swiss National Bank Chairman Thomas Jordan and other officials believed the lender faced an existential crisis that could not be solved by just injecting cash, two of the sources said.

Nationalising the bank would have allowed regulators to install new managers who could restore confidence, one person with knowledge of the matter said.

But Switzerland's financial regulator FINMA and the finance ministry opposed the idea, as did Credit Suisse's management, the sources said. Unable to agree, Swiss authorities decided the best solution was to let the company find its own way, the three sources added.

More:

 
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