Author: Li Yunfei | Source: Original
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In the last episode, I said that the UK and Switzerland may now become the two " black swan " of Western countries , facing the risk of a storm.
But what I didn’t expect was that the change came so quickly. Now Switzerland is likely to lead the UK and become the first country to fall in the developed Western countries.
In early October this year, an Australian business reporter announced that a large investment bank was on the verge of bankruptcy. Under the speculation of some overseas media, the market directly targeted its Credit Suisse in Switzerland, resulting in a decline in Credit Suisse's stock price and a surge in credit default swap , falling into rumors of "bankruptcy".
According to the financial report released by Credit Suisse, the company's net loss in the third quarter of this year reached 4.03 billion Swiss francs , which is approximately RMB 30 billion. also plans to lay off 9,000 employees within three years. By 2025, Credit Suisse's employees will drop from 52,000 to about 43,000; in the fourth quarter, the group will start its first wave of layoffs, with the first wave of layoffs involving 2,700 people.
What's going on? We must know that Credit Suisse is the second largest bank in Switzerland and the fifth largest consortium in the world. The total assets of exceed US$892 billion. This size is 1.5 times the assets held by Lehman Brothers when crashes.
How could a bank group of such a big size reach this point today?
Because in recent years, on the one hand, Credit Suisse has been troubled by a series of scandals, including the liquidation incident of Argus Capital Management and the bankruptcy of Greenhill Capital, which has caused it to lose billions of dollars, and has also forced its investment bank supervisor and chief risk officer to leave.
On the other hand, Credit Suisse was convicted in a lawsuit allegedly helping with money laundering, becoming the first large bank in Swiss history to be found guilty in a criminal case.
The most important point is that with the advent of the Russian-Ukrainian conflict, media reports that the account information of 18,000 Credit Suisse customers in was leaked. These accounts involve a total of 30,000 individuals and corporate entities hidden wealth, exceeding 100 billion Swiss francs, each with an average holding of 7.5 million Swiss francs, of which nearly 200 accounts are worth more than 100 million Swiss francs, and more than a dozen accounts are worth billions.
This ruined the image of Switzerland's neutral country , and even ruined the golden sign of Credit Suisse's "absolute confidentiality and absolute security". Now Credit Suisse has started to run on , which is the most deadly for banks.
According to data, as of October 3, Credit Suisse's 5-year credit default swap reached its highest level since the 2008 financial crisis. Swaps linked to Credit Suisse show that the probability of bond defaults in this Swiss bank is about 23%.
In order to reverse the situation, Credit Suisse also announced the launch of major strategic reforms, planning to significantly reform its investment banking business in the next three years, transfer most of its equity in securitization product business, and also plans to reduce the cost base by 15%, and reduce it to 14.5 billion Swiss francs by 2025.
Although Credit Suisse has launched a new development strategy, the market does not recognize it. On the same day, Credit Suisse's stock price fell by 20% on the New York Stock Exchange.
Because some people believe that Credit Suisse is not saving itself, but laying mines for itself. Because if you want to solve the short-term crisis, you should leverage with , rather than selling assets. Credit Suisse is now selling its hotels, asset management business in the United States, and securitization products department headquartered in New York.
We must know that the securitization product business department is Credit Suisse’s best cash business department! According to previously disclosed information, Credit Suisse's current leverage exposure is as high as US$873 billion. In comparison, the cash obtained by selling assets is just a drop in the bucket.
Now there is only one reason why Credit Suisse does not deleverage and sells assets, that is, Credit Suisse’s high leverage is difficult to remove, and it can only sell all high-quality assets to save them.But in the end, you will only leave an empty shell, and then wait for the thunder to ring and all the negative assets will be cleared.
This is similar to the bankruptcy routine of Lehman Brothers back then. Before the incident with Lehman Brothers, the financial institutions on Wall Street emptied all the high-quality assets, and then threw a large amount of negative assets to Lehman Brothers, and in the end there was only one thunder. When the huge thunder sounded, all the bad debts were written off.
In other words, if this thunder really detonates, then Switzerland, as a developed Western country, will completely fall.
With the conflict between Russia and Ukraine, the US dollar rate hikes , and the black swan event in Western countries followed one after another. First, the British pension fund was facing liquidation, and now Switzerland is facing bankruptcy. Who do you think will fall first?
Author: Li Yunfei, founder of a well-known Internet company and CEO of a large food chain company. He has been engaged in the Internet and physical chain industry for 16 years. He has been reported continuously by well-known media platforms such as Sohu.com, NetEase Finance, Tencent , Phoenix.com , Zhongxun.com , Baidu and other well-known media platforms. He is good at financial knowledge analysis and entrepreneurial guidance!
