By Davit Kirakosyan
The Swiss Financial Market Supervisory Authority FINMA and the Swiss National Bank SNB have released a joint statement in response to concerns about the potential impact of the recent turmoil in the U.S. banking market on the Swiss financial system. The two organizations have affirmed that there is no immediate risk of contagion for Swiss institutions as a result of the problems facing certain U.S. banks, given the strict capital and liquidity requirements applicable to them.
Credit Suisse Group (NYSE:CS), one of Switzerland's largest and most globally active banks, has been particularly affected by recent market reactions. However, FINMA has confirmed that the bank meets the capital and liquidity requirements applicable to systemically important banks. In addition, the SNB has pledged to provide liquidity to the bank if necessary.
Credit Suisse experienced a sharp drop in its stock price of around 30% intra-day today (closing with nearly a 13% loss), and some of its bonds also declined to a point that indicates financial difficulties. This was due to the Saudi National Bank's announcement that it would not increase its stake in Credit Suisse due to regulatory limitations. The decline in Credit Suisse's value had a ripple effect, causing other European banks to also decrease in value. This was in response to investor concern following the recent turbulence caused by the collapse of Silicon Valley Bank, prompting them to avoid taking risks with banking investment.