BlackRock Says No To Credit Suisse – Are Their Books So Bad?

Credit Suisse Group, a global investment bank based in Switzerland, is struggling to survive. However, despite rumors, BlackRock speaks it is not interested in participating in any plans to acquire the bank.

Credit Suisse is under pressure

Swiss loan is the second largest bank in Switzerland. The lender’s shares plummeted 30% last week, sending him into a financial spiral that spooked his investors.

In response, the bank announced that it would borrow up to 50 billion Swiss francs, or $53.7 billion, from the Swiss National Bank in bailout funds. However, the troubles of the bank have not yet ended.

According to reports, the Swiss bank may need to take additional steps to restore the confidence of its investors.

BlackRock, the world’s largest asset manager, says it is not interested in participating in any plan to acquire all or any part of the struggling bank. This announcement made viewers sympathize corner office question the seriousness of the problem in Credit Suisse’s books.

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The global market is currently experiencing high levels of volatility, making investors hyper-sensitive to the identity and economic position of financial institutions. That’s why BlackRock’s announcement has had a significant impact on Credit Suisse’s efforts to restore confidence.

The situation between BlackRock and Credit Suisse is similar to Binance’s intention to avoid FTX and the subsequent crash of FTX. Assuming everything was worse than what was previously advertised.

UBS could take over to restore confidence

Credit Suisse shares have fallen more than 70% over the past year, with customers withdrawing $133 billion from 2022 to now. In February, the bank reported an annual net loss of about $8 billion, the worst since the 2008 financial crisis.

Share price of Credit Suisse Group|  Source: NYSE, Trading View.
Share price of Credit Suisse Group| Source: NYSE, Trading View.

To restore confidence in the financial sector, the Swiss government and global authorities are moving closer to a deal on UBS Group take over Credit Suisse and fix the crisis of confidence.

Credit Suisse also announced that it will buy back some of its debt. Some analysts are not supportive, seeing such actions as a potential vulnerability that could hinder his survival.

On the other hand, BlackRock is exploring the use of blockchain and stock tokenization as an upgrade to the traditional stock market.

One use case could be to address the inefficiency of transferring shares between brokers. Unlike traditional share transfer transactions that require confirmation within a few days, the blockchain can provide automatic recording and instant processing of share transfer transactions.

Feature image from Getty Images, chart from TradingView

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