Attention had focused on Credit Suisse after the collapse of US banks Silicon Valley Bank, Silvergate and Signature Bank, which sparked fears of contagion across the global banking sector. Shares in the Swiss bank collapsed after it reported last Tuesday “material weaknesses” in its financial reporting, and the stock lost further ground on Friday despite rallying briefly following the injection of a £44bn loan from the Swiss central bank to boost its liquidity on Wednesday. It was hoped that the UBS takeover of Credit Suisse would settle nerves on global financial markets yesterday morning. The takeover of Credit Suisse by UBS was done fast and should have provided reassurance to the market that we haven’t had another bank collapse. These are bonds that are designed to be written off or converted to equity in order to bolster a bank’s capital position prior to it defaulting.

Source: The Herald March 21, 2023 06:38 UTC