London Daily

Focus on the big picture.
Wednesday, Nov 04, 2026

Swiss central bank throws financial lifeline to Credit Suisse after shares pummelled

Swiss central bank throws financial lifeline to Credit Suisse after shares pummelled

Swiss regulators pledged a liquidity lifeline to Credit Suisse (CSGN.S) in an unprecedented move by a central bank after the flagship Swiss lender's shares tumbled as much as 30% on Wednesday.

In a joint statement, the Swiss financial regulator FINMA and the nation's central bank sought to ease investor fears around Credit Suisse, saying it "meets the capital and liquidity requirements imposed on systemically important banks." They said the bank could access liquidity from the central bank if needed.

The statement came after a major government and at least one bank put pressure on Switzerland to act, said people familiar with the matter, as the lender became caught up in a crisis of confidence after the collapse of Silicon Valley Bank last week.

Credit Suisse said it welcomed the statement of support from the Swiss National Bank and FINMA.

Credit Suisse would be the first major global bank to be given such a lifeline since the 2008 financial crisis - though central banks have extended liquidity more generally to banks during times of market stress including the coronavirus pandemic.

SVB's demise, followed by that of Signature Bank two days later, sent global bank stocks on a roller-coaster ride this week, with investors discounting assurances from U.S. President Joe Biden and emergency steps giving banks access to more funding.

By Wednesday, focus had shifted from the United States to Europe, where Credit Suisse led a rout in bank shares after its largest investor said it could not provide more financial assistance because of regulatory constraints.

Hoping to quell concerns, FINMA and the Swiss central bank said there were no indications of a direct risk of contagion for Swiss institutions from U.S. banking market turmoil.

Earlier, Credit Suisse shares led 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.

The investor exit for the doors prompted fears of a broader threat to the financial system, and two supervisory sources told Reuters that the European Central Bank had contacted banks on its watch to quiz them about their exposures to Credit Suisse.

One source said, however, that they saw Credit Suisse's problems as specific to that bank, rather than being systemic.

"(The) SVB collapse is a firm- and U.S.-specific problem, but now markets have reawakened to global banks’ risks – from interest rate/duration to liquidity and credit risk – and European banks are engulfed by a confidence crisis," said Davide Oneglia, senior economist at TS Lombard.

The U.S. Treasury is monitoring the situation around Credit Suisse and is in touch with global counterparts, a Treasury spokesperson said.

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."

On Wall Street, major indexes closed down on Wednesday, with big U.S. banks including JPMorgan Chase & Co (JPM.N), Citigroup (C.N) and Bank of America Corp (BAC.N) falling. The KBW regional banking index (.KRX) declined 1.57%.



'FLIGHT TO SAFETY'


In the United States, large banks have managed their exposure to Credit Suisse in recent months and view risks emanating from the lender as manageable so far, according to three industry sources who declined to be identified because of the sensitivity of the situation.

Rapid rises in interest rates have made it harder for some businesses to pay back or service loans, increasing the chances of losses for lenders who are also worried about a recession.

Traders are now betting that the Federal Reserve, which just last week was expected to accelerate its interest-rate-hike campaign in the face of persistent inflation, may be forced to hit pause and even reverse course.

Futures tied to the Fed's policy rate were pricing a slightly better-than-even chance that policymakers will leave their benchmark lending rate in its current 4.5%-4.75% range at their upcoming meeting on March 21-22.

Traders' bets on a large European Central Bank interest-rate hike at Thursday's meeting also evaporated quickly as the Credit Suisse rout fanned fears about the health of Europe's banking sector. Money market pricing suggested traders now saw less than a 20% chance of a 50 basis point rate hike at the ECB meeting.

Unease sparked by SVB's demise has also prompted depositors to seek out new homes for their cash.

Ralph Hamers, CEO of Credit Suisse rival UBS (UBSG.S) said market turmoil has steered more money its way.

"In the last couple of days as you might expect we've seen inflows," Hamers said. "It is clearly a flight to safety from that perspective, but I think three days don't make a trend."

Deutsche Bank (DBKGn.DE) CEO Christian Sewing said that the German lender has also seen incoming deposits.

Focus is also shifting increasingly to the possibility of tougher rules for banks, particularly mid-tier ones like SVB (SIVB.O) and New York-based Signature Bank (SBNY.O), whose collapses triggered the market tumult.

U.S. Congress needs to act on bipartisan legislation strengthening banking industry controls, Senate Majority Leader Chuck Schumer said, though Senate Banking Committee Chairman Sherrod Brown downplayed the likelihood of Congress passing a "significant" banking bill anytime soon.

Newsletter

Related Articles

0:00
0:00
Close
Northern Ireland Executive Agrees on Multi-Year Public Sector Pay Restructuring Framework at Stormont
Department for Transport Confirms Acceleration of Electric Vehicle Charging Infrastructure Rollout Along Strategic Motorways
Welsh Government Announces Emergency Funding Package to Support Agricultural Sector Facing Severe Weather Impacts
High Court Rules in Favor of Environmental Coalition Over Government Carbon Reduction Plan Deficiencies
Office for National Statistics Reports Stable Retail Sales Growth Supported by Strong Digital Commerce Volumes
Scottish First Minister John Swinney Secures Cross-Party Support for Renewable Energy Export Expansion
National Health Service Digital Reports Major Breakthrough in Reducing Elective Waiting Lists Across England
Chancellor Rachel Reeves Outlines Infrastructure Spending Reforms to Boost Regional Economic Growth Across Northern England
Bank of England Holds Baseline Interest Rate at Five Percent Amid Persistent Core Inflation Pressures
House of Lords Advances Representation of the People Bill to Modernize Electoral Law Ahead of General Election
Financial Markets and Private Equity Assess Tax and Corporate Realignment Following Recent Chancellor Budget Adjustments
Justice Committee Warns Legal Aid Is a Service in Managed Decline Due to Inadequate Government Funding Responses
Royal Navy Intercepts Russian Intelligence Vessel and Warships Across Intensive North Sea Operations
Business and Trade Committee Slams Government Policy on China as Fragmented and Lacking Strategic Direction
Home Secretary Shabana Mahmood Softens Immigration Plans Following Intensive Cabinet Backlash Over Settlement Timelines
Automotive Industry Data Reveals Continued Acceleration in Battery Electric Vehicle Registrations Across British Dealerships
High Court of England and Wales Rules on Landmark Legal Challenge Regarding Local Government Housing Mandates
Department for Energy Security and Net Zero Approves Expanded Offshore Wind Infrastructure Along Scottish Coastline
Competition and Markets Authority Launches Broad Investigation Into Artificial Intelligence Infrastructure and Cloud Partnerships
United Kingdom and European Union Launch High-Level Preparations for Bilateral Defense and Security Summit in Brussels
National Health Service England Unveils Emergency Workforce Reforms to Alleviate Winter Accident and Emergency Pressures
Chancellor Rachel Reeves Finalizes Autumn Budget Adjustments to Meet Fiscal Rules and Fund Public Services
Bank of England Prepares for Interest Rate Decision Amid Rising Bond Yields and Inflationary Pressures
House of Lords Begins Detailed Legislative Scrutiny of Representation of the People Bill and Cyber Security Laws
Metropolitan Police Detain More Than Three Hundred Individuals Following Large-Scale Demonstration Outside London Embassy
Home Office Prepares Stricter Residency Rules Requiring Vulnerable Migrants to Wait Decade for Settlement Rights
Professional Mental Health Bodies Demand Statutory Regulation for Counsellors and Psychotherapists
National Grid Confirms Construction of Britain's Largest Electrical Substation to Power Teesside Data Centre
Prime Minister Keir Starmer Travels to Samoa for Commonwealth Summit Amid Debates on Economic Cooperation and Reparations
Home Office Implements Enhanced Digital Border Controls and Visa Processing Systems at Major Airports
Office for National Statistics Reports Stable Employment Participation Rates Across Regional Labor Markets
Department for Business and Trade Announces Strategic Partnership to Secure Critical Mineral Supply Chains
Scottish Government Unveils Regional Economic Development Strategy to Boost Advanced Manufacturing in Glasgow and Dundee
Treasury Officials Review Taxation Frameworks and Capital Gains Rules Ahead of Autumn Budget Disclosures
National Health Service Leaders Warn of Winter Capacity Pressures Across Acute Care Facilities
Bank of England Prepares for Key Interest Rate Decision Amid Sticky Inflation and Fiscal Policy Pressures
Home Office Expands Border Security Operations and Intelligence Sharing With European Partners
Office for National Statistics Reports Modest Retail Sales Growth Ahead of Crucial Christmas Trading Season
Welsh Government Unveils Strategic Plan to Boost Regional Technology Innovation and Digital Skills Training
Department for Environment Food and Rural Affairs Implements New Agricultural Subsidies Framework for English Farmers
Scottish First Minister John Swinney Announces Major Regional Infrastructure and Green Energy Investment Strategy
National Health Service Leaders Warn of Severe Winter Pressures and Mounting Accident and Emergency Backlogs
Bank of England Monetary Policy Committee Signals Cautious Interest Rate Path Amid Persistent Services Inflation
Chancellor of the Exchequer Rachel Reeves Finalizes Autumn Budget Framework Aiming to Close Public Sector Fiscal Gap
Department for Science, Innovation and Technology Prepares Enhanced Artificial Intelligence Safety and Cyber Defense Frameworks
United Kingdom Government Expands International Sanctions Framework Against Russian Shadow Fleet and Financial Enablers
Institute of Directors Reports Sharp Post-Budget Drop in Business Confidence Despite Long-Term Investment Intention Shifts
Chancellor John Healey Defends Sweeping Fiscal Adjustments and Household Support Packages Following Autumn Budget
Parliamentary Petitions Committee Schedules Major Legislative Debates on Special Educational Needs and Non-Stun Meat Labelling
Regional Devolution and Good Growth Fund Frameworks Reshape Local Government Funding Across English Regions
×