The Swiss National Bank (SNB) has released an official statement announcing it will provide liquidity to Credit Suisse if necessary. Specifically, The Swiss Financial Market Supervisory Authority, FINMA, and the SNB have asserted there is “no direct risk of contagion,” from the Silicon Valley Bank closure last week
Credit Suisse saw its shares fall from as much as 30.8% today, following the turmoil in the US banking sector. Conversely, the report states that the national bank will provide liquidity requirements to banks that prove systematically important. Subsequently, through Swiss standards, Credit Suisse would qualify.
SNB to Intervene in Credit Suisse Crisis
Last week, the financial sector of the US was met with panic following the closure of Silicon Valley Bank, and Signature Bank. Subsequently, the development marks the largest banking failure since 2008, creating a rightful concern over the state of the industry. Consequently, that concern has now extended beyond the US, in today’s developing stock of Credit Suisse.
Now, following pressure on Switzerland to intervene in the crisis, the Swiss National Bank has announced will provide liquidity to Credit Suisse if necessary. Specifically, a statement made today notes the Zurich-based bank meets the criteria of a systematically important bank.
The statement read, “Regulation in Switzerland requires all banks to maintain capital and liquidity buffers that meet or exceed minimum requires for the Basel standards.” Additionally noting that “…systematically important banks have to meet higher capital and liquidity requirements. This allows negative effects of major crises and shocks to be absorbed.”
Alternatively, the statement noted that “…the problems of certain banks in the USA do not pose a direct risk of contagion for the Swiss financial markets.” Referring to the closure of three prominent banks in recent weeks.