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☆ Exclusive: Swiss authorities mull imposing losses on Credit Suisse bondholders
▼ + stars: | 2023-03-19 | by ( John O'Donnell | ) www.reuters.com time to read: +2 min

FRANKFURT, March 19 (Reuters) - Swiss authorities are examining imposing losses on Credit Suisse (CSGN.S) bondholders as part of a rescue of the bank, two sources with knowledge of the matter said on Sunday. Losses on bondholders could need to be larger if Credit Suisse were wound down rather than if it were taken over by UBS, one of the sources said. Authorities are trying to engineer a UBS takeover of Credit Suisse before financial markets reopen on Monday. Credit Suisse and UBS declined to comment. Credit Suisse bonds plunged into distressed territory at or below 30 cents on the dollar this week as investors worried about the health of the bank even after the Swiss National Bank provided the lender with a $54 billion emergency loan.

March 18 (Reuters) - UBS Group AG (UBSG.S) is seeking government guarantees of about $6 billion for a potential takeover of Credit Suisse Group AG (CSGN.S), a person with knowledge of the discussions told Reuters on Saturday. The guarantees would cover the cost of winding down parts of Credit Suisse and potential litigation charges, the source said. Credit Suisse was valued at the equivalent of about $8 billion at the close on Friday. Deutsche Bank AG is also interested in acquiring parts of Credit Suisse, the first source said. Bloomberg earlier reported the German lender's interest in parts of Credit Suisse.

Some industry executives said the central bank should prioritize financial stability now. “Go fast and hard on financial stability; go gradual and slow on price stability,” said Peter Orszag, chief executive of financial advisory at investment bank Lazard Ltd (LAZ.N). The central bank declined to comment. Others have joined in, with the European Central Bank raising rates by 50 basis points earlier this week. The events this past week correspond to a 1.5% increase in the Fed funds rate, Slok wrote.

☆ Exclusive: Some Credit Suisse counterparties curb dealings as bank heads into scenario meetings -sources
▼ + stars: | 2023-03-17 | by ( Shankar Ramakrishnan Stefania Spezzati Sumeet Chatterjee | Shankar Ramakrishnan | Stefania Spezzati | ) www.reuters.com time to read: +5 min

Credit Suisse declined to comment. Credit Suisse intends to borrow up to 50 billion Swiss francs ($54 billion) from the Swiss National Bank in what it called "decisive action" to boost its liquidity on Thursday. The five people with direct knowledge of the bank's trading counterparties requested anonymity because of the sensitivity of the situation. Credit Suisse has said that it is a strong, global bank. Among possible scenarios, analysts, bankers and investors speculate that Credit Suisse could sell or wind down some of its existing businesses with a break-up potentially on the cards.

☆ Exclusive: Some Credit Suisse counterparties put curbs on new dealings involving lender -sources
▼ + stars: | 2023-03-17 | by ( Shankar Ramakrishnan Stefania Spezzati Sumeet Chatterjee | Shankar Ramakrishnan | Stefania Spezzati | ) www.reuters.com time to read: +4 min

[1/3] The logo of Societe Generale bank is pictured on an office building in Nantes, France, March 16, 2023. Credit Suisse declined to comment. These five people with direct knowledge of the matter requested anonymity because of the sensitivity of the situation. Societe Generale has maintained existing counterparty positions with Credit Suisse, which it had cut back in recent weeks, but it is not increasing them, according to two sources with direct knowledge of the situation. Another global bank has reduced its unsecured exposure to Credit Suisse, which includes all lending with no collateral, according to a person with knowledge of the matter.

March 16 (Reuters) - Credit Suisse Group AG's (CSGN.S) average liquidity coverage ratio, a measure of how much cash-like assets the bank has, did not change between March 8 and March 14, the Swiss lender said on Thursday, despite the global banking crisis. The bank said in an earlier press release on March 16 that the 150% LCR value was as of March 14. Credit Suisse for months has been battling to regain the trust of clients and investors after a series of scandals and losses in recent years. By tapping the central bank for funds, the bank will be adding to liquidity if needed. A firm is viable when it generates sufficient income to stay in business and meets its obligations including payments and debt commitments.

☆ Exclusive: Credit Suisse tells staff SNB facility does not trigger a 'viability' event
▼ + stars: | 2023-03-16 | by ( Selena Li | ) www.reuters.com time to read: +1 min

March 16 (Reuters) - Credit Suisse Group AG (CSGN.S) told staff on Thursday that the emergency backstop from the Swiss central bank does not trigger a "viability event," according to documents seen by Reuters. The document gave talking points to staff for client conversations. Credit Suisse declined to comment on the memo. On Tuesday, Credit Suisse said in its 2022 annual report the bank had identified "material weaknesses" in internal controls. Additional reporting by Stefania Spezzati; Writing by Paritosh Bansal; Editing by Elisa Martinuzzi and Mark PotterOur Standards: The Thomson Reuters Trust Principles.

☆ On the precipice: How Credit Suisse's day of drama unfolded
▼ + stars: | 2023-03-16 | by ( ) www.reuters.com time to read: +5 min

Fifteen years later, Credit Suisse Group AG found itself on a similar precipice. By the time traders in New York were switching on screens on Wednesday, Credit Suisse had lost more than a fifth of its value. Credit Suisse did not comment for this story but noted recent interviews given by its CEO saying the bank was strong. STILL SMOLDERINGMarkets seemed to calm, but the fresh drama around Credit Suisse jogged memories that the financial system was not out of the woods yet. "We welcome the statement of support," Credit Suisse said.

☆ BlackRock CEO Fink warns of financial risks, persistent inflation
▼ + stars: | 2023-03-15 | by ( Ross Kerber | ) www.reuters.com time to read: +4 min

[1/2] Larry Fink, Chief Executive Officer of BlackRock, stands at the Bloomberg Global Business forum in New York, U.S., September 26, 2018. Fink wrote that after the regional banking crisis, the financial industry could see what he termed "liquidity mismatches." “It’s too early to know how widespread the damage is,” Fink wrote. BlackRock has previously said its diversified products "have limited exposure to Silicon Valley Bank." "The monetary and fiscal tools available to policymakers and regulators to address the current crisis are limited, especially with a divided government in the United States," Fink wrote.

☆ First Republic spoke to private equity before securing financing -sources
▼ + stars: | 2023-03-15 | by ( ) www.reuters.com time to read: +3 min

NEW YORK, March 15 (Reuters) - First Republic Bank (FRC.N) spoke to at least one private equity firm about raising capital before it secured financing from JPMorgan Chase & Co (JPM.N) and U.S. authorities intervened with support for the industry, two sources familiar with the matter said. First Republic had various approaches and ideas put to it, a third source familiar with the matter said, adding that private equity firms have capital to deploy and were looking for opportunities. They added that the private equity deal talks ended once First Republic announced its credit line with JPMorgan. First Republic said on Sunday night it had secured additional financing through JPMorgan, giving it access to a total of $70 billion in funds through various sources. In some cases, the situation had flipped from banks looking for capital to investors seeking bargains, one of the sources said.

Possible outcomes for under-pressure regional banks could see a stronger rival take over a weaker, or cash infusions from investors such as private equity, the industry sources said. Reuters GraphicsUNDER PRESSUREInvestors voted with their feet on Monday, putting bank stocks under pressure around the world. So investors think it’s a relative gamble staying around owning regional banks before knowing what will change in regulation," said Brian Levitt, global market strategist for Invesco. Regional bank stocks are "an incredible bargain now," billionaire investor Bill Ackman said on Twitter on Monday. "There’s value in these banks, they are not all alike," said Michael Farr, chief executive of investment advisory firm Farr, Miller & Washington who owns banks stocks including PNC and Truist.

WASHINGTON/SINGAPORE, March 13 (Reuters) - U.S. authorities launched emergency measures on Sunday to shore up confidence in the banking system after the failure of Silicon Valley Bank (SIVB.O) threatened to trigger a broader financial crisis. Silicon Valley Bank (SVB), a mainstay for the startup economy, was a product of the decades-long era of cheap money, with unique risks that made it especially vulnerable. With the Fed poised to continue raising interest rates, investors said the financial system may not be fully out of the woods just yet. Goldman Sachs' analysts said they no longer expect it to raise rates at that meeting, amid the stress in the banking sector. A senior U.S. Treasury official said the actions taken would protect depositors, while providing additional support to the broader banking system, but officials and regulators were continuing to monitor financial system stability.

☆ First Republic secures new facility from JPMorgan
▼ + stars: | 2023-03-13 | by ( ) www.reuters.com time to read: 1 min

March 12 (Reuters) - U.S. private bank First Republic Bank (FRC.N) said on Sunday it had secured additional financing through JPMorgan Chase & Co (JPM.N), giving it access to a total of $70 billion in funds through various sources. First Republic's announcement came after its share price was hit last week in the aftermath of a run on SVB Financial Group (SIVB.O). Silicon Valley Bank's collapse on Friday prompted U.S. Federal Reserve and other regulators to announce a series of emergency measures to shore up confidence in the banking system. In a statement, First Republic said additional borrowing capacity from the U.S. Federal Reserve as well as that from JPMorgan had boosted the amount of liquidity it had available. Reporting by Paritosh Bansal; Editing by Kim CoghillOur Standards: The Thomson Reuters Trust Principles.

☆ Exclusive: PNC, RBC interest in SVB cools as regulators seek rescue bids
▼ + stars: | 2023-03-12 | by ( ) www.reuters.com time to read: +2 min

[1/3] A man puts a sign on the door of the Silicon Valley Bank as an onlooker watches at the bank’s headquarters in Santa Clara, California, U.S. March 10, 2023. The Federal Deposit Insurance Corporation (FDIC) had given a Sunday afternoon deadline for bids for the failed bank, one of the sources said. PNC, one of the 10 largest U.S. banks by assets, wanted to pursue a bid for the entirety of Silicon Valley Bank, one of the sources added, but then studied a bid for parts of Silicon Valley Bank. RBC also explored a takeover of Silicon Valley Bank but it was unlikely to pursue it, three sources said. U.S. Treasury Secretary Janet Yellen on Sunday ruled out a government bailout of Silicon Valley Bank and said she was working with regulators to find a solution.

The Federal Deposit Insurance Corporation (FDIC), which was appointed receiver, was trying to find another bank over the weekend that was willing to merge with Silicon Valley Bank, people familiar with the matter said on Friday. However, it was not clear if regulators would have political support to throw a lifeline to the bank, which catered to Silicon Valley startups and investors. Silicon Valley Bank had an unusually high level of deposits that were not covered by the FDIC's guarantees, which are capped at $250,000. Signature Bank, First Republic Bank, PacWest Bank and Charles Schwab did not immediately respond to requests for comment. "Silicon Valley had a unique business model that was less dependent on retail deposits than a traditional bank."

Big investors including Kyle Bass and Bill Ackman argue the government must take quick action to avoid Silicon Valley Bank's collapse sparking more widespread withdrawals in the banking system. That could be determined by how hard the world's central banks continue to push interest rates higher. The market is signaling contagion could factor into the Fed's calculus, possibly prompting it to slow down the pace of interest rate hikes. Silicon Valley Financial Group was deeply woven into the fabric of the technology industry. Bass and Ackman separately warned that the government would have to move quickly in resolving Silicon Valley Bank to assure depositors.

[1/2] European Central Bank and SVB (Silicon Valley Bank) logos are seen in this illustration taken March 10, 2023. SVB, which does business as Silicon Valley Bank, was not immediately available for comment. "Silicon Valley Bank is shedding light on vulnerabilities across the US banking sector, primarily in the bond holdings that many large institutions hold," said Karl Schamotta, Chief Market Strategist at Corpay. “The current liquidity run on Silicon Valley Bank is having a knock-on effect on the wider banking system," said Rick Seehra, Prudential Lead at Bovill. But banking experts said SVB's issues were unique and the worries about the broader sector were not warranted.

☆ VIEW SVB meltdown triggers global drop in bank shares
▼ + stars: | 2023-03-10 | by ( ) www.reuters.com time to read: +2 min

March 10 (Reuters) - The failure of troubled tech-lender SVB Financial Group's (SIVB.O) efforts to raise capital through a stock sale rippled through global markets on Friday and sent shares of many banks tumbling. read moreShares of SVB, which does business as Silicon Valley Bank, were halted on Friday after tumbling as much as 66% earlier in premarket trading. The S&P 500 banks index (.SPXBK) dropped 0.63% on Friday after a 6.6% decline on Thursday, while the KBW Regional Banking index (.KRX) was down 2.3%. Europe's STOXX banking index (.SX7P) fell almost 5%, tracking toward its biggest one-day percentage slide since June 2022. If investors are concerned about deposit flow, why punish the stocks who have sticky, operational retail checking deposits?

☆ Analysis: Some highly rated US companies take unusual funding route as rates rise
▼ + stars: | 2023-02-27 | by ( Shankar Ramakrishnan | ) www.reuters.com time to read: +4 min

Credit-worthy companies have found in the past that they can raise funds more cheaply in investment-grade bond markets. They were able to issue the securities at much lower interest rates than what they would have had to pay on a bond. In interviews, two bankers and an investor said that uncertainty has made convertible bonds an attractive option to raise money for some investment-grade companies. Earlier this week, for example, investors bought PPL’s convertible bond at 100 cents on the dollar, or at par. Because defensive stocks such as utilities like PPl could benefit if interest rates keep rising, potential returns for investors in convertible bonds could be boosted.

An Austrian official said that Austrian authorities were monitoring the situation at Raiffeisen and its business in Russia closely because of the bank's importance. Almost a year since Moscow launched what it calls a "special military operation" in Ukraine, Raiffeisen is among a handful of European banks that remain in Russia. Raiffeisen made a net profit of roughly 3.8 billion euros last year, thanks in large part to a 2 billion euro plus profit from its Russia business. Alternatively, OFAC can also resort to less stringent measures such as levying fines and sending warning letters over sanctions violations. OFAC has sanctioned five major Russian banks, including state-backed Sberbank (SBER.MM) part of a response to that country's invasion of Ukraine, as well as wealthy oligarchs.

☆ Exclusive: Credit Suisse markets CSFB as 'super boutique', sees revenue rebound
▼ + stars: | 2023-02-06 | by ( Paritosh Bansal | ) www.reuters.com time to read: +6 min

Veteran dealmaker Michael Klein has stepped down from the Credit Suisse board to become CEO. Third-party capital would help fund the unit's lending as a standalone entity, Credit Suisse said, without providing additional details. At the same time, Credit Suisse would pull back from certain businesses, such as providing revolving credit lines to companies and non-essential trading. Bloomberg News reported last month that Credit Suisse was nearing a deal to buy the boutique for a few hundred million dollars. Longer term under its plan for CSFB, Credit Suisse projects net revenues could rise to as much as $3.5 billion.

[1/2] Indian billionaire Gautam Adani speaks during an inauguration ceremony after the Adani Group completed the purchase of Haifa Port earlier in January 2023, in Haifa port, Israel January 31, 2023. On Wednesday, a $2.5 billion sale of shares by one of its companies Adani Enterprises ADEL.NS was called off. Adani Group and the stock market regulator the Securities and Exchange Board of India (SEBI) did not respond to a request for comment. Cracking the code of how Hindenburg did the trade could lead to more short sellers taking positions against Indian companies, which have been rare, analysts said. But several bankers familiar with trading in Indian securities said the more profitable piece of the short seller’s bet would likely lie in the derivative trades it had placed.

[1/2] Goldman Sachs' Chairman and CEO David Solomon attends a session at the 50th World Economic Forum (WEF) annual meeting in Davos, Switzerland, January 21, 2020. REUTERS/Denis BalibouseNEW YORK, Jan 27 (Reuters) - To listen to Goldman Sachs Group Inc (GS.N) chief executive David Solomon, the bank is doing "great," while skeptical investors wonder what comes next. Still, Goldman shares are up 3.6% over the past year, outperforming the S&P 500 banking index and peers. In October, Goldman scaled back ambitions for Marcus by placing it under the newly-merged asset and wealth division. "Going back to what has made Goldman great for decades will allow the firm to reset and recover," he said.

Increasingly, they said conversations in C-suites and with financiers had turned to the risks that climate change presented to businesses. Climate activist Greta Thunberg made the journey up the Swiss Alps to call on the global energy industry and its financiers to end all fossil fuel investments. Suni Harford, the president of UBS's asset management arm who leads the bank's sustainability efforts, said her conversations at Davos suggested no let up in focus on climate, despite the shorter-term pressures. "Clients are becoming ever more informed on the energy transition, demand for sustainable and green products has held up well, and clients are increasingly looking to measure the impact of their portfolios." "Put forward credible and transparent transition plans on how to achieve net zero – and submit those plans before the end of this year," Guterres said in a speech.

[1/4] People stand in front of the Blockchain Hub Davos 2023 at the Promenade road during the World Economic Forum (WEF) 2023, in the Alpine resort of Davos, Switzerland, January 16, 2023. REUTERS/Arnd WiegmannDAVOS, Switzerland, Jan 19 (Reuters) - In the snow and ice on the main drag in Davos, the impact of the crypto winter is plain for WEF attendees to see. Executives in Davos said they are now all about blockchain technology, proper controls and regulation, and the promise of disruption that it holds for financial services and beyond. Colm Kelleher, chairman of Swiss bank UBS (UBSG.S), told a WEF panel that blockchain technology will help reduce costs for banks. "We kind of dodged a bullet," Kelleher said, noting that the collapse in the value of crypto currencies had not caused systemic problems.

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