(Crazy) economy news

[Skybird]

The central banks have created bubbles and bubbles, and then blew them up more and more.

Are we seeing the first cracks in the balloon hull?

The deposit guarantee system in Germany guarantees, depending on the institute association, 0.6 to 0.8% of the total customer deposits. It's already better positioned than the American one, but please - what are guarantees for not even 1% of the deposits?

Joys of fractional reserve banking, one of the biggest coups in the history of financial crime. Have fun.

[Skybird]

Frankfurter Allgemeine Zeitung:
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After the turbulence surrounding the Silicon Valley Bank, politicians and financial supervisors repeated it like a mantra: There is no risk of contagion, the big banks are now much more resilient. But the storm has not yet passed the financial markets, as the fall in the price of Credit Suisse shares now shows.

This time, however, it is not a medium-sized institute with a special business model like the Silicon Valley Bank. Now a major bank is on fire, and there should no longer be any doubts about it due to the strict equity and liquidity requirements. But investors mistrust the institute more and more. This can be seen not only from the fall in the share price, but also from the skyrocketing risk premiums on the bond market. These are now signaling increased default risks for the bank.

Credit Suisse's crisis of confidence is certainly due to many shortcomings that other financial institutions have avoided. However, Credit Suisse is not an isolated case because it has stuck to investment banking for too long. Deutsche Bank found itself in a similar situation not too long ago. She had to make a deep, painful cut and has now regained her footing.

Deep cuts are also needed at Credit Suisse, but time seems to be running out. Should the major Swiss bank falter, given its size and importance on the capital market, it could trigger a financial crisis like the one that followed the Lehman collapse in September 2008. Then the resilience of the banks would really be put to the test.

It is to be hoped that the management of Credit Suisse and the supervisors in Switzerland will finally be aware of their responsibility. Because the crisis of confidence surrounding Credit Suisse has been smoldering for too long.
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[Dargo]

Originally Posted by Skybird

Frankfurter Allgemeine Zeitung:
-----------------------------------


After the turbulence surrounding the Silicon Valley Bank, politicians and financial supervisors repeated it like a mantra: There is no risk of contagion, the big banks are now much more resilient. But the storm has not yet passed the financial markets, as the fall in the price of Credit Suisse shares now shows.

This time, however, it is not a medium-sized institute with a special business model like the Silicon Valley Bank. Now a major bank is on fire, and there should no longer be any doubts about it due to the strict equity and liquidity requirements. But investors mistrust the institute more and more. This can be seen not only from the fall in the share price, but also from the skyrocketing risk premiums on the bond market. These are now signaling increased default risks for the bank.

Credit Suisse's crisis of confidence is certainly due to many shortcomings that other financial institutions have avoided. However, Credit Suisse is not an isolated case because it has stuck to investment banking for too long. Deutsche Bank found itself in a similar situation not too long ago. She had to make a deep, painful cut and has now regained her footing.

Deep cuts are also needed at Credit Suisse, but time seems to be running out. Should the major Swiss bank falter, given its size and importance on the capital market, it could trigger a financial crisis like the one that followed the Lehman collapse in September 2008. Then the resilience of the banks would really be put to the test.

It is to be hoped that the management of Credit Suisse and the supervisors in Switzerland will finally be aware of their responsibility. Because the crisis of confidence surrounding Credit Suisse has been smoldering for too long.
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Credit Suisse has been struggling with scandals for months: a money laundering investigation, loss-making investments, hassles in the boardroom. Yesterday, Credit Suisse published last year's annual results with bad news again. Accounting deficiencies were revealed. Auditor PwC spoke of "flaws in internal control systems". When it also became clear that Credit Suisse's main shareholder - Saudi National Bank - could no longer assist financially, investors started selling their shares. According to the Saudis, they cannot put more money into it as they are not allowed to own more than 10 per cent of the shares.