Switzerland under pressure to intervene on Credit Suisse as bank rout deepens
Switzerland is under pressure from at least one major government to intervene quickly on Credit Suisse, a source familiar with the situation told Reuters, after the Swiss bank led a rout of European bank stocks on Wednesday.
Credit Suisse (CSGN.S) shares dropped by as much as 30.8%, leading a 7% fall in the European banking index (.SX7P), while five-year credit default swaps (CDS) for the flagship Swiss bank hit a new record high, reviving fears of a broader threat to the financial system.
Two supervisory sources told Reuters that the European Central Bank (ECB) had contacted banks on its watch to quiz them about their exposures to Credit Suisse.
One of the sources said, however, that they saw Credit Suisse’s problems as specific to that bank, rather than being systemic.
The U.S. Treasury is monitoring the situation around Credit Suisse and is in touch with global counterparts about it, a Treasury spokesperson said on Wednesday. Asked about the impact of Credit Suisse’s problems on the U.S. banking system, U.S. Senator Bernie Sanders told Reuters: “Everybody is concerned.”
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