Facts: $68 billion withdrawn from Credit Suisse in Q1 2023
The recent market turmoil surrounding the collapse of Silicon Valley Bank and Signature Bank has had a significant impact on Credit Suisse. Customers rapidly withdrew billions of Swiss francs from the bank, causing the collapse of the 167-year-old institution.
According to Credit Suisse's report, released on April 24th, approximately $68 billion in Swiss francs were withdrawn from the bank in the first quarter of 2023. This demonstrates the extent of the bank run that led to the bank's collapse. However, Credit Suisse's merger with UBS is expected to be completed soon.
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The bank has been struggling for some time. The report indicates that assets managed by Credit Suisse's most important asset management division fell to 502.5 billion francs by the end of March this year, compared to 707 billion francs in the same period in 2022.
The situation became so dire that Swiss authorities were forced to intervene with rescue measures. They implemented a financial guarantee package worth more than 200 billion francs and arranged for UBS, the largest bank in Switzerland, to take over Credit Suisse in exchange for 3 billion francs in shares. Unfortunately, this resulted in a loss of up to 5 billion francs for UBS.
To avoid bankruptcy, the government coordinated the merger with UBS on the weekend before the market reopened. Additionally, the Swiss Central Bank provided $120 billion in government guarantees and liquidity support to rescue Credit Suisse.
The collapse of Credit Suisse highlights the fragile state of the global financial sector. It also illustrates the importance of implementing robust risk management measures to prevent future crises. This situation serves as a cautionary tale for other institutions and highlights the need for greater oversight and regulation of the financial industry. Hopefully, the lessons learned from the Credit Suisse crisis will serve as an impetus for positive changes in the industry.
Facts: $68 billion withdrawn from Credit Suisse in Q1 2023
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