Credit Suisse has problems
There were reports of the potential insolvency of Switzerland’s second-largest bank. The market reacted nervously.
News that the Credit Suisse bank may be insolvent led investors to sell off shares. The bank’s credit risk index is at a record low. Its share price fell 10 percent on Monday, and 60 percent since the beginning of the year. Ulrich Koerner, the bank’s CEO, reassured over the weekend that the bank has a strong capital and liquidity base. However, investors fear its bankruptcy, as was the case with Lehman Brothers.
The bank is expected to present a restructuring plan at the end of the month. Credit Suisse is working on selling assets and business. It is studying the possibility of selling its securitized products trading unit. It is also considering selling its wealth management operations in Latin America.