Recently, a message has been circulating in the foreign market. David Taylor, a business reporter under the Australian Broadcasting Corporation (ABC), reported according to "Reliable News" that a large investment bank is on the verge of bankruptcy . After the news of
came out, somehow many people turned their attention to Credit Suisse, an internationally renowned investment bank with a century-old history. This is explosive news, and its weight is no less than that of Lehman Brothers' bankruptcy. You should know that the bankruptcy of Lehman Brothers not only completely pierced the bubble in the US real estate market, exposing the subprime mortgage crisis in full, but also kicked off the global financial crisis , allowing the financial crisis to sweep the entire world, thus causing the world economy to enter a long-term downturn.
If the rumors are true and Credit Suisse really goes bankrupt, what kind of storm will it cause? Does it mean that Europe will enter the quagmire of a new round of financial crisis? is indeed the case. The consequences are serious and the expectations are steep, which is a bit creepy. After all, Europe is really not peaceful in today's current situation. In addition to the Russian-Ukrainian conflict and the energy crisis of , the economic recovery is also extremely difficult and the risk of an economic recession is extremely high.
Faced with bankruptcy rumors, although Credit Suisse CEO quickly sent a message to clarify, comforting employees not to confuse their daily stock price performance with the company's "strong capital base and liquidity situation". However, such comfort obviously does not have much effect. From February last year to the end of September this year, Credit Suisse's share price fell from $14.90 to $3.92, down nearly 80%. cannot be eliminated with a few words of comfort for a large investment bank, nor can it be said that a "strong capital base and liquidity situation". You should know that on the eve of bankruptcy, Lehman Brothers also had such "bold words". Practice has proved that no matter how powerful the language is, it is not as strong as the market. What the market needs is the strength of the enterprise, not the strength of language, and the ability of operators to handle complex problems, not the ability to shout slogans.
According to data released by Bloomberg, the credit default swap index of Credit Suisse climbed to 250 basis points last Friday, approaching the level when Lehman Brothers went bankrupt in 2008. And, based on the resources that Credit Suisse can provide, it seems that it cannot prevent the rise of the credit default swap index. What's more, the current international economic situation, especially the European economic and financial situation, is not better than in 2008, and is even much worse. Then, the external environment has a negative effect on Credit Suisse's support. In this way, the market protection of Credit Suisse has basically disappeared, and it can only rely on its own strength and ability. If you have such strength and ability, such news will not be heard. The result of Credit Suisse's success is obviously inseparable from the "care of the United States" and is the "credit" of the Federal Reserve . The continued violent hike of interest rates not only caused great harm to emerging economies, but also severely injured European developed economies. If Lehman Brothers' bankruptcy is "benefited" by the subprime mortgage crisis in the United States, thus destroying this century-old investment bank. This violent interest rate hike in the Federal Reserve will cause many financial institutions to go bankrupt.
Little did not know that while the world has been under excessive liquidity and huge pressure on inflation, the violent interest rate hikes from the Federal Reserve have quickly gathered international funds into the United States, causing other countries to have to invest a large amount of currency into the market while following up interest rate hikes to cope with the risk of international funds withdrawal. As a result, the amount of money in circulation has also increased further, which has put greater pressure on inflation. The pound, yen and euro have depreciated significantly, and there are not many ways and capabilities to prevent from depreciating . We can only watch the depreciation of the local currency. Next, it was the time for the United States to "cut leeks" in a crazy way. The main producer of leeks this time should be European countries.
Of course, the most fundamental reason for the credit Swiss financial crisis is not The Federal Reserve raises interest rates . In 2021, Credit Suisse suffered a "double critical hit" from ArchegosCapital's liquidation and GreensillCapital's bankruptcy, causing the company to suffer billions of dollars in losses, forcing its investment banking executives and chief risk officers to leave. Meanwhile, Credit Suisse was convicted in a lawsuit allegedly helping drug dealers launder money, becoming the first large bank in Swiss history to be found guilty in a criminal case. In other words, the internal factors of are the key to the problems with Credit Suisse. However, without the violent interest rate hikes from the Federal Reserve, the large amount of international funds flowing to the United States, and the follow-up rate hikes and large amounts of currency issuance from other countries, Credit Suisse may still be able to barely maintain until the risks are overcome. , and judging from the current situation, there may be only one way to go bankrupt.
What is more worrying is that besides Credit Suisse, are there any other similar financial institutions that have serious risks, and will it cause more crises in more internationally renowned financial institutions, and more attention is needed. If the risk scale expands, no one can guarantee that a new round of financial crisis will not occur. By then, the world economy may really enter a full-scale recession, or even a very serious economic crisis stage.
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