Race to resolve Credit Suisse situation by market open

Investment Analysis Clubs Macro Economic Trends and Risks
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… to avoid risk of a(nother) broad financial crisis unfolding:

March 19 (Reuters) - Authorities were scrambling to rescue Credit Suisse (CSGN.S) on Sunday before financial markets reopen as UBS AG (UBSG.S) sought $6 billion from the Swiss government as part of a possible purchase of its rival, a person with knowledge of the talks said. A crisis of confidence has rocked 167-year-old Credit Suisse, among the world’s largest wealth managers, in the wake of the collapse of U.S. lenders Silicon Valley Bank and Signature Bank.

As one of 30 global systemically important banks, Credit Suisse’s failure would ripple throughout the entire financial system. “The last days of Credit Suisse”, proclaimed the front page of Swiss newspaper NZZ am Sonntag over an illustration of the bank’s headquarters in flames.

While regulators want a resolution before markets reopen on Monday, one source cautioned the talks are encountering significant obstacles, and 10,000 jobs may have to be cut if the two banks combine. …

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Anyone else notice that the resolution used in, iirc, Sweden, 15 or more years ago: nationalization of failed banks, is not even being discussed?

I remember nationalization being floated in the US in 2008-09, and immediately dismissed as Socialistical, as the government threw money at the banks, failed and not failed, to prop everything up.

The US used to be able to nationalize things, like the Penn Central railroad, but nope, can’t do that anymore. Too Socialistical. The “one size fits all” solution to every crisis is to throw money at the “JCs”.

Steve

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UBS just agreed to buy them. Crisis averted? Or just kicked down the road?

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Presumably averted for now. Until rising rates trigger the next blowup somewhere else.

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