Home Featured Financial market turmoil – 20-24 March 2023

Financial market turmoil – 20-24 March 2023

Financial market turmoil – 20-24 March 2023

Last week, financial market turmoil was a dominant theme on the markets. It is still a hot topic as various rescue plans are evaluated!

UBS purchased Credit Suisse for $3 billion in an agreement to purchase shares. UBS The shares fell 9.6% For 15.46 Swiss francs you can buy a while Credit Suisse shares dived nearly 60% 0.77 Swiss Francs. In an effort to avoid a larger crisis in the banking system, Swiss officials brokered this agreement. It includes liquidity provisions and extensive government guarantees. Stockholders still face losses, as well as approximately $17 bln in AT1 bonds. The AT1 bonds will cease to be valid and become worthless to help private investors cover the costs.. This will likely lead to a revaluation by other banks of similar bonds, which is potentially threatening stability in the European market for similar bank debt. It is estimated that the market is worth approximately a quarter trillion dollars. UBS said it plans to “downsize Credit Suisse investment banking business” and align it with its “conservative risk culture”. The government’s loss-guarantee, which foresees that UBS assumes the first $7 billion The federal government is the next $9 Billion, was necessary because the hastily drawn up deal didn’t give much time to do due diligence and Credit Suisse has had to value assets on its books…

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