Credit Suisse is reeling in financial trouble

Credit Suisse is reeling in financial trouble 4
Credit Suisse is reeling in financial trouble 4

Opening today’s trading session, Credit Suisse bank shares (Switzerland) fell by 11% to a record low.

Credit Suisse has been in the spotlight over the past few days.

A CDS is a derivative instrument that allows one investor to swap credit risk with another investor.

In fact, Market Watch said this level is not unusual for a business.

Credit Suisse shares are at a record low.

CEO Ulrich Koerner had to reassure employees and the market over the weekend.

Koener said the bank is looking to `adopt measures to strengthen asset management, reform investment banking, evaluate strategic options for securitization products, as well as

Wall Street Journal quoted internal sources saying Koener confirmed their capital buffer is about nearly 100 billion USD.

However, observers do not think that this bank has enough capital.

Besides, although the increase in Credit Suisse’s CDS fee is not to the extent that it shows difficulty in repaying debt and is partly a consequence of the market sell-off, it also shows that investors are gradually losing confidence in this bank.

In addition, at a time when Wall Street companies were reporting profits, Credit Suisse lost money for three consecutive quarters.

In October, they were also fined $475 million by US and UK officials for lending to state-owned companies in Mozambique.

This raises concerns that Credit Suisse’s situation will have the same impact as Lehman Brothers bank.

However, some analysts believe that Credit Suisse’s bankruptcy risk has been greatly exaggerated.

On CNBC, Komal Sri-Kumar – Director of Sri-Kumar Global Strategies also did not think that the markets were heading towards a `Lehman moment`.

Analysts at Citi also doubt the possibility of a spillover effect to US banks.

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