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☆ Big investor in Credit Suisse bonds says 'bail-in' system worked
▼ + stars: | 2023-03-22 | by ( Herbert Lash | ) www.reuters.com time to read: +3 min

The firm's exposure to Credit Suisse AT1s represented 1.32% of Spectrum's assets under management (AUM) on Feb. 28. In 2021 and early 2022 Spectrum held about $400 million of Credit Suisse AT1 bonds, Jacoby said. The Credit Suisse debt represents about 12% of the benchmark for CoCos, a massive slice of the ICE BofA U.S. dollar contingent capital index (.MERCOCO), he said. "We had been paring back in Credit Suisse, had an internal negative outlook for a little over a year." "This is a Credit Suisse event and this is a Swiss bank regulation event, this is not a global disaster for CoCos."

☆ Wall Street is confident high-yielding banks won't cut their dividends
▼ + stars: | 2023-03-22 | by ( Scott Schnipper | ) www.cnbc.com time to read: +5 min

Atlanta's Truist Financial ($41 billion) now yields 6.2% while Minneapolis's U.S. Bancorp ($53 billion) pays 5.1% on its common stock. After all, high dividend yields are often a sign of financial or business distress, or a red flag that the payments so many mom-and-pop investors depend on are unsustainable. Wall Street just doesn't think most payouts will be cut — so long as any recession this year stays on the mild side. "Despite these lower dividend growth expectations, we believe these bank holdings still have attractive dividends," Peris added. A final straw in the wind: Wall Street has issued dozens of research reports since Silicon Valley Bank went under.

☆ A retro red, blue, and white Credit Suisse ski cap is attracting ferocious bids online — and prices are now up to $200
▼ + stars: | 2023-03-21 | by ( Huileng Tan | ) www.businessinsider.com time to read: +3 min

Credit Suisse merch is popping up in online marketplaces following the 167-year-old lender's merger with UBS. Branded gold bars and bags are some of the other Credit Suisse merch available on the platforms. One listing of the Credit Suisse cap started at 80 francs on March 19. Bidding on other Credit Suisse merch — such as this tote bag and a coin bank — also attracted four and five bids, respectively. And while Credit Suisse merch may be attracting buyers, the same cannot be said for the shares of the 167-year-old lender.

LONDON, March 20 (Reuters) - Bank of America's electronic stocks desk has halted trading with a desk at Credit Suisse that uses computer-led strategies, "out of an abundance of caution effective today," an email seen by Reuters on Monday said. Bank of America (BAC.N) said it would no longer send trades to Credit Suisse's "ATS Crossfinder". That trading platform anonymously matches buy and sell orders for the same kinds of securities, according to the Credit Suisse (CSGN.S) website. Bank of America sent the email to traders and hedge fund clients on Monday morning. Credit Suisse declined to comment on the email and Bank of America also declined to comment.

March 20 (Reuters) - Shares of U.S. lender First Republic tumbled nearly 50% on Monday on fears it will need a second rescue to stay afloat, bucking a broader rally in bank shares driven by UBS Group's state-backed takeover of Credit Suisse. "First and foremost, the Credit Suisse, UBS merger certainly takes a lot of stress out of the global banking system." The 3 billion Swiss franc ($3.2 billion) deal for the troubled Swiss bank - which was once worth more than $90 billion - was engineered by Swiss regulators and announced on Sunday. European bank shares (.SX7P) rebounded from recent losses, while on Wall Street the S&P 500 banks (.SPXBK) index recovered 0.6%. [1/2] Buildings of Swiss banks UBS and Credit Suisse are seen on the Paradeplatz in Zurich, Switzerland March 20, 2023.

☆ Credit Suisse memorabilia up for grabs in online shops after merger
▼ + stars: | 2023-03-20 | by ( ) www.reuters.com time to read: +1 min

[1/3] Gold bars from the Credit Suisse are seen in a shop in Zurich, Switzerland March 20, 2023. Dozens of bars of gold, stamped with the name of the issuer - the 167-year-old Credit Suisse - were uploaded to the country's most popular online marketplaces, Ricardo.ch and tutti.ch. With it still unknown whether the Credit Suisse brand will be continued, the sellers are seeking to attract those looking to snap up a piece of Swiss financial history. Credit Suisse is expected to remain an independent brand until the merger is complete, at which point UBS will decide whether to pull the plug on the separate Credit Suisse identity. Corporate swag from recently failed Silicon Valley Bank is also proving popular online, as is merchandise linked to Lehman Brothers, which filed for bankruptcy at the height of the 2008 financial crisis.

In a package engineered by Swiss regulators on Sunday, UBS Group AG (UBSG.S) will pay 3 billion Swiss francs ($3.2 billion) for 167-year-old Credit Suisse Group AG <CSGN.S>, which was once worth more than $90 billion. European bank shares inched into positive territory (.SX7P) while shares in U.S. financial giants Citigroup (C.N) and JPMorgan Chase (JPM.N) rose 1.2% and 0.7% respectively. Investor focus had shifted to the massive blow some Credit Suisse bondholders will take, a new worry in a rolling banking sector crisis sparked by the collapse of midsize-U.S. lenders Silicon Valley Bank (SVB) and Signature Bank (SBNY.O) earlier this month. [1/2] Buildings of Swiss banks UBS and Credit Suisse are seen on the Paradeplatz in Zurich, Switzerland March 20, 2023. QUESTIONS FOR UBSThe deal to buy Credit Suisse will make UBS Switzerland’s only global bank and the Swiss economy more dependent on a single lender.

In a package engineered by Swiss regulators on Sunday, UBS will pay 3 billion Swiss francs ($3.23 billion) for 167-year-old Credit Suisse Group AG (CSGN.S) and assume up to $5.4 billion in losses. Investor focus has now shifted to the massive blow some Credit Suisse bondholders will take, adding to anxiety about other banking sector risks including contagion and the fragile state of U.S. regional lenders. UBS acquiring Credit Suisse for 3 billion francs a week ago would have seemed like a terrific deal. Buildings of Swiss banks UBS and Credit Suisse are seen on the Paradeplatz in Zurich, Switzerland March 20, 2023. QUESTIONS FOR UBSThe deal to buy Credit Suisse will make UBS Switzerland’s only global bank and the Swiss economy more dependent on a single lender.

European bank shares slumped, with an index of leading lenders (.SX7P) down 5.8%. Credit Suisse shares slumped 62%, reflecting the huge loss its shareholders will see in their investment in the bank. Monetary authorities in Singapore and Hong Kong, where Credit Suisse hosts large regional offices, separately said the Swiss bank's business continued without interruption. And Credit Suisse urged its staff to go to work, according to a memo to staff seen by Reuters. Credit Suisse staff arriving to work in Hong Kong and Singapore on Monday morning, however, fretted about retrenchments and retaining business.

The European Central Bank vowed to support euro zone banks with loans if needed, adding the Swiss rescue of Credit Suisse was "instrumental" in restoring calm. There are also concerns about what happens next at Credit Suisse and what that means for investors and employees. The Swiss central bank said Sunday's deal includes 100 billion Swiss francs ($108 billion) in liquidity assistance for UBS and Credit Suisse. Credit Suisse shares had lost a quarter of their value last week. The bank was forced to tap $54 billion in central bank funding as it tries to recover from scandals that have undermined confidence.

☆ Credit Suisse memorabilia up for grabs in online shops
▼ + stars: | 2023-03-20 | by ( ) www.reuters.com time to read: +1 min

☆ Buy Berkshire Hathaway stock for Warren Buffett's steady hand during crises, says Morningstar
▼ + stars: | 2023-03-20 | by ( Yun Li | ) www.cnbc.com time to read: +2 min

Warren Buffett's long history of aiding failing banks is one reason for investors to buy Berkshire Hathaway shares now, in the midst of the latest banking blowup, according to Morningstar. "Another banking crisis, another call to Buffett," Morningstar analyst Greggory Warren said in a note Monday. The legendary investor has been a white knight for troubled banks on other occasions. Buffett also famously came to Goldman Sachs' rescue with a $5 billion cash infusion after the collapse of Lehman Brothers in 2008. The analyst said Berkshire shares are appealing right now and could serve as downside protection given its diverse businesses and unmatched balance sheet strength.

The logos of Swiss banks Credit Suisse and UBS on March 16, 2023 in Zurich, Switzerland. Credit Suisse shares collapsed by 60% at around 9:05 a.m. London time (5:05 a.m. Swiss authorities and regulators helped to facilitate the deal, announced Sunday, as Credit Suisse teetered on the brink. The size of Credit Suisse was a concern for the banking system, as was its global footprint given its multiple international subsidiaries. "This suggests that a substantial part of Credit Suisse's $570bn assets may be either impaired or perceived as being at risk of becoming impaired.

The terms of the deal will see Credit Suisse shareholders receive 1 UBS share for every 22.48 Credit Suisse shares they hold. "This acquisition is attractive for UBS shareholders but, let us be clear, as far as Credit Suisse is concerned, this is an emergency rescue. The Swiss National Bank pledged a loan of up to 100 billion Swiss francs ($108 billion) to support the takeover. UBS initially offered to buy Credit Suisse for around $1 billion Sunday, according to multiple media reports. It reported a full-year net loss of 7.3 billion Swiss francs for 2022 and expects a further "substantial" loss in 2023.

The FT said UBS had offered a price of 0.25 Swiss francs ($0.27) a share to be paid in UBS stock. Credit Suisse shares ended Friday at 1.86 Swiss francs. Credit Suisse and UBS declined to comment on the reports when contacted by CNBC. The Swiss bank's balance sheet is around twice the size of Lehman Brothers when it collapsed, at around 530 billion Swiss francs as of end-2022. It reported a full-year net loss of 7.3 billion Swiss francs for 2022 and expects a further "substantial" loss in 2023.

☆ Fed and other central banks try to head off crisis by boosting flow of dollars
▼ + stars: | 2023-03-19 | by ( Mark Thompson | ) edition.cnn.com time to read: +3 min

Credit Suisse — one of the 30 most important banks in the global financial system — was bleeding money last week after investor and customer confidence collapsed. Swap lines are agreements between two central banks to exchange currencies. They allow a central bank to obtain foreign currency from the central bank that issues it, and distribute it to commercial banks in their country. During the global financial crisis of 2008 following the collapse of Lehman Brothers, funding markets dried up because of an extreme aversion to risk. From Monday through at least the end of April, the Fed and other central banks will make dollars available on a daily basis, rather than weekly.

☆ Fail or sale? What could be next for stricken Credit Suisse
▼ + stars: | 2023-03-18 | by ( Elliot Smith | ) www.cnbc.com time to read: +6 min

In this article CSG.N-CHSBNY Follow your favorite stocks CREATE FREE ACCOUNTPeople walk by the New York headquarters of Credit Suisse on March 15, 2023 in New York City. Barry Norris, CEO of Argonaut Capital, which has a short position in Credit Suisse, stressed the importance of a smooth outcome. watch nowEuropean banking shares have suffered steep declines throughout the latest Credit Suisse saga, highlighting market concerns about the contagion effect given the sheer scale of the 167-year-old institution. At the moment, the forecaster sees the problems at Credit Suisse and SVB as "a collection of different idiosyncratic issues." "We know that for most banks, including Credit Suisse, that exposure to higher yields has largely been hedged.

☆ BlackRock denies report that it's preparing a takeover bid for Credit Suisse
▼ + stars: | 2023-03-18 | by ( Katrina Bishop | ) www.cnbc.com time to read: +2 min

BlackRock headquarters in New York, US, on Friday, Jan. 13, 2023. via Getty ImagesBlackRock has denied a report that it is preparing a takeover bid for embattled Swiss lender Credit Suisse . "BlackRock is not participating in any plans to acquire all or any part of Credit Suisse, and has no interest in doing so," a company spokesperson told CNBC Saturday morning. Its future looks to be hanging in the balance after a multibillion-dollar lifeline offered by the Swiss central bank last week failed to calm investors. Credit Suisse was already in the midst of a massive strategic overhaul aimed at restoring stability and profitability. The default at hedge fund Archegos Capital not long after led to another $5.5 billion loss for the Swiss investment bank.

☆ This fund manager shorted Credit Suisse — and he's sticking with his bet
▼ + stars: | 2023-03-18 | by ( Ganesh Rao | ) www.cnbc.com time to read: +5 min

Barry Norris, fund manager at Argonaut Capital, said Saturday morning that he still expects Credit Suisse 's stock to become worthless. "If this happens we would expect [Credit Suisse] equity holders to get zero, deposit holders guaranteed and probably but not certain that bond holders will be made whole." Norris' Argonaut Absolute Return Fund fund delivered 11.3% in returns last year amid a year of losses for the broader stock market. Credit Suisse has had tumultuous few years, battling various scandals and controversies . Credit Suisse had invested heavily in Greensill and marketed its funds to clients, but the firm collapsed in 2021, leaving Credit Suisse and its customers with $1.7 billion in losses and reputational damage.

☆ Nobel economist Paul Krugman says the Silicon Valley Bank collapse has led to 'apocalyptic rhetoric' in markets, but almost none of it is true
▼ + stars: | 2023-03-17 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +5 min

The collapse of Silicon Valley Bank has bred "apocalyptic" fears in markets, but most are unfounded, Paul Krugman said. The Nobel economist refuted myths about SVB's failure and rescue in an op-ed for the NYT. The tech-focused bank failed a week ago, and was taken over by the FDIC to mark the largest bank collapse since the 2008 crisis. While Krugman believes SVB's collapse wasn't another Lehman Brothers moment, the bank was still a crucial part of the tech sector, which justifies its rescue. SVB's collapse will undermine the Fed's inflation fightThe fourth unfounded fear, Krugman says, is that the collapse of Silicon Valley Bank could interfere with the Fed's inflation fight.

☆ Analysis: As worries over banks swirl, investors seek protection against market crash
▼ + stars: | 2023-03-17 | by ( Saqib Iqbal Ahmed | ) www.reuters.com time to read: +5 min

The S&P 500 is down 5% from its early February high though it remains up 3% year to date. ... Now the downside tail has a lot more risk priced into it," said Chris Murphy, co-head of derivatives strategy at Susquehanna. Volatility in the Cboe Volatility Index (.VIX), which reflects expectations of stock volatility, has been muted by comparison, though the index hit a five-month high earlier this week. "That is something worth monitoring closely to gauge the expansion of risk within the system," he said. Reporting by Saqib Iqbal Ahmed; Editing by Ira Iosebashvili and Mark PorterOur Standards: The Thomson Reuters Trust Principles.

☆ The market is on the verge of a Lehman-style event as the financial world thrashes in the wake of global banking turmoil, veteran trader Art Cashin says
▼ + stars: | 2023-03-17 | by ( Morgan Chittum | ) www.businessinsider.com time to read: +2 min

The market may be nearing its Lehman moment yet again, Art Cashin told CNBC. The Wall Street vet said certain investors could use the banking crisis for their own financial gain. "We are on the edge of what we were doing back when Lehman got in trouble," Cashin told CNBC on Friday. In the span of a week, Silicon Valley Bank and Signature Bank were seized by regulators, while Silvergate announced it was winding down operations and liquidating positions. The Fed has forced many of these banks to reconfigure their portfolios," Cashin said, pointing to the US central bank's rate hikes.

For more than a decade after the collapse of Lehman Brothers in 2008, Washington’s regulatory watchdogs sought to ensure that they would never again face fraught weekend deliberations about propping up the financial system from a bank failure. Last weekend, they did.

☆ Morning Bid: Swiss lifeline, ECB dilemma
▼ + stars: | 2023-03-16 | by ( ) www.reuters.com time to read: +6 min

The Swiss lender said it would exercise an option to borrow from its central bank up to 50 billion Swiss francs ($54 billion). That followed assurances from Swiss authorities on Wednesday the country's second largest bank met "the capital and liquidity requirements imposed on systemically important banks". Policymakers and regulators across Europe and Asia rushed to reassure the public and markets that banks in their jurisdictions were safe and well-capitalised. Like other central banks, the ECB has been raising interest rates rapidly to curb inflation and has since July tightened credit at its fastest pace on record. As it stands, money markets now price an 80% chance the ECB will move tentatively and only hike by a quarter point to 2.75%.

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