Credit Suisse Needs Friends Now More Than Ever
The firm is hardly Silicon Valley Bank — though it’s not doing much to help anyone understand that.
Where are my friends?
Photographer: TIMOTHY A. CLARY/AFPIt’s often when you’re most in need that you find you have the fewest friends. So it is for Credit Suisse Group AG. Its shares took another pasting on Wednesday, dropping as much as 30% to less than 2 Swiss francs ($2.17) — a record low.
In markets that have been verging on panic for days after three US lenders failed, investors are ditching anything that smells of banking risk. They are worried about deposit flight and the pain caused by rising rates. And Credit Suisse is at the top of the list of banks to bet against because of the flood of outflows it saw last year and its inability to stop making bad headlines. It’s in the middle of a complicated, radical restructuring, and its position gets more precarious the more its stock price falls and as the cost of insuring its bonds against default jumps higher.