The problem with Credit Suisse and banking sector.

Dewiana

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Quote from: Die_empty on March 20, 2023, 09:58:19 PM

The financial crisis experienced by Credit Suisse is a clear indication of the failure of the banking system. This bank has been a living dead for many years because of issues like financial management, poor decision, and fines due to tax invasion scandals. The constant increase of interest rates reveals the emptiness of the bank which led to the withdrawal of funds by its customers. The banking system is not transparent and truthful. Even when it is clear that banks need help, they will keep giving customers false hope that everything is okay. Every day it is getting clearer that the solution to this banking mess is decentralization. It is too risky to put the financial destiny of millions of people in the hands of a few corrupt people.

When it was in 2014, it was tainted with the case of the American department of justice, Credit Suisse was found guilty of conspiring
to assist in terms of not paying taxes on its clients right away the Bank has reached agreement with the Department of Justice in January 2017, regarding the issue of residential mortgage-based securities.

At the moment, even though Credit Suisse has operated in more than 50 countries, so with the rapid development of technology, if a bank does not keep up with the times, the bank will go bankrupt.

johnyj

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In USA, I don't think there is any problem, just cash unbalance between small and large banks.

In digital era, money withdrew from small Bank A will end up in large Bank B, Bank A just need to borrow them back from Bank B to deal with cash shortage. And that is why JPM and other large banks who received those money are willing to help the small banks. Money does not go anywhere outside of the banking system. However, this is a good chance for large banks to wipe out competitors by refusing providing help

Credit Suisse's case is little bit more complicated, since they use Swiss Franc, could not get that help from other Swiss banks if the withdraw is in form of USD, they have to borrow money from withdraw destination bank, and when that is not feasible, they were wiped out

naikturun

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It's difficult to predict where the market will move next, but it's important for investors to keep a close eye on developments and make informed decisions based on the available information. Patience and a long-term perspective are often key when it comes to investing, particularly during times of uncertainty and volatility.

GreenStox

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The weakness in internal control that Credit Suisse has identified is particularly worrying, as it suggests that there may be deeper problems within the bank that have yet to come to light. This uncertainty can lead to a loss of confidence among investors and customers, which can in turn cause a further decline in the bank's stock prices and financial stability.

Gayong88

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About Credit Suisse and the banking sector of course caused a stir. Credit Suisse, as one of the largest banks in Europe, is facing several serious challenges affecting the European banking sector as a whole. Bank bonds and CDS took a hit, which is not good news for anyone, as this has international implications.

The current situation is very worrying. Delays in issuing annual reports and announcements of internal control weaknesses have so eroded confidence in banks that shareholders are hesitant to give away more money, and people have been withdrawing their funds from banks for the last three months.

This implies that more people are moving away from banks and investing in more stable assets, which increases bank risk and the best decision at this point is to wait and see how things unfold.

Darker45

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Quote from: crypticj on March 15, 2023, 10:23:58 PM

I think the best decision right now is to wait for what will happen next because it's pretty hard to predict where the market will move next.

What are we waiting? We're just in the first quarter of the year and there are already a considerable number of small and giant banks collapsing. There was Silvergate. There was Signature Bank. There was Silicon Valley Bank. There is Credit Suisse. There's First Republic that was just rescued from an impending collapse. There is also JPMorgan buying millions of stones. LOL! There's nothing to wait. Are we waiting for the alarms to sound off? Are we waiting for the actual bank run to happen so that we'll start making withdrawals? Man, there are trillions of deposits in the banks. How much does FDIC have? A hundred billion?

Barcode_

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The federal reserve had just announced another 0.25 percentage rate hike in the US, I think the crisis in the banking sector will continue as the federal reserve are still keeping up with their aggressive interest rate hike to fight inflation.

I think the federal reserve are making a mistake with their aggressive interest rate hike plan to combat inflation as there are other reasons causing inflation around the world. The war between Ukraine and Russia had resulted in the prices of food rising as both of these countries are big producers for wheat and it have severely impact the food prices around the world due to the ongoing war.

I wonder if we will see another bank failure this year if the federal reserve still insists on rising interest rate to fight inflation which are clearly not working very well.

Fortify

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Quote from: crypticj on March 15, 2023, 10:23:58 PM

I think you all noticed that the stock market went down again and this time it's because of Credit Suisse.
It is still one of the biggest banks in Europe so the European banking sector has some problems too.

Their bonds, CDS, everything is going down and it's bad news not just for people from Europe but for everyone cos this is international.

Credit Suisse had some problems in previous years but this time it's wild. They delayed their annual report and announced that they have weaknesses in internal control which is awful for the bank. And the largest shareholders started saying that they won't give any money to Credit Suisse. People are withdrawing from this bank for the last 3 months but now it's got even worse.

Because risk is getting higher, people move away from banks to invest in more stable assets. The US is helping banks to bail out depositors but banks still have to keep credit flowing which is pretty hard considering the loss of trust in this sector.

I think the best decision right now is to wait for what will happen next because it's pretty hard to predict where the market will move next.

"Waiting to see what will happen" is honestly the most terrible idea in times of panic, it needs to be treated immediately and decisively. Luckily the Swiss government stepped in to back the bank and then UBS was in a position to take it over, restoring an element of calm around the recent banking crisis. The real problem is how lazy central bankers and governments were, taking the easy ride by keeping interest rates low for so long, allowing cheap money to flood into all sorts of places while stable government bonds were sidelined. They looked really clever, but in reality they got away with doing very little when rates were sub 2% and were praised as genuises - it was bound to cause a disaster eventually, especially now raises are so fast.

YUriy1991

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The banking sector faces challenges such as low interest rates, increased competition from fintech companies, and ongoing regulatory scrutiny. I think Banks have to navigate this challenge while maintaining profitability and managing risk. The Credit Suisse incident highlighted the importance of good risk management practices and the need for transparency and accountability in the banking sector.

Credit Suisse has faced backlash and criticism for its involvement in high-risk investment strategies, including the collapse of Greensill Capital, a supply chain finance firm in which Credit Suisse invested. This led to financial losses for Credit Suisse and possible legal and regulatory consequences. The incident also raised questions about the bank's due diligence and risk management practices when dealing with high-risk investments.

Smartprofit

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Quote from: royalfestus on March 22, 2023, 01:19:24 PM

Today, the US Federal Reserve declared an increase in interest rates of 25 basis points, bringing the range to 4.75% to 5%. This marks the highest rate since 2007, just before the worldwide financial crisis. Prior to the announcement, experts had differing opinions on whether the US central bank would proceed with a rate hike or choose to pause, given the turbulence in the US banking industry

I wonder how the increase in the US Federal Reserve rate will affect the price of Bitcoin? If, despite the rate increase, the price of Bitcoin continues to rise and exceed $30,000, then this means that the bearish period in the cryptocurrency market has indeed come to an end.

In general, the current situation in the economy is very unusual and has no analogues in world history. In fact, this is an ancient Greek Chimera - a variety of indicators, observing which financiers used to accurately assess the state of affairs in the economy, now they give very conflicting information.

In fact, now the banking system has to be managed manually, because the banking legislation does not work.

The state is bailing out individual banks in an attempt to avoid even worse consequences, but the state has no idea what to do with the situation with the economy as a whole.

royalfestus

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Today, the US Federal Reserve declared an increase in interest rates of 25 basis points, bringing the range to 4.75% to 5%. This marks the highest rate since 2007, just before the worldwide financial crisis. Prior to the announcement, experts had differing opinions on whether the US central bank would proceed with a rate hike or choose to pause, given the turbulence in the US banking industry

dimonstration

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Dimon69

The problem was all the customers money is not 100% insured due to their risky investment that used the customers money for their company gain in exchange for a tiny interest for the depositors money. Bankers is just playing with their customers money. Risking it on investment and paying only the insured money once they loss in their investment.

It’s funny that government choose to bail them out using tax payer money that creates pattern for other banks to do the same. Expect a global economic repercussions for this kind of foolish action to save this banks.

zasad@

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Quote from: crypticj on March 15, 2023, 10:23:58 PM

I think the best decision right now is to wait for what will happen next because it's pretty hard to predict where the market will move next.

The best solution is to withdraw your savings from the bank now. You don't need to keep more money in the bank than you need for your standard monthly expenses.
Most bank assets are worthless paper, so when this ecosystem collapses, it's best to keep as little money in banks as possible.

Smartprofit

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Quote from: HostColor on March 21, 2023, 01:32:35 PM

The most important thing in 2023 is that the primary causes of the 2007–2008 financial crisis - an enormous amount of poor-quality subprime mortgages spread around the world through derivatives in the balance sheets of poorly capitalized banks — do not apply in 2023. So, it is unlikely to have a major banking crisis in 2023.

In my opinion, the banking system is now under threat. This is due to the development of modern communication technologies.

Not a single bank in the world can avoid bankruptcy if all depositors simultaneously demand the return of their deposits.

At the same time, earlier the return of deposits was a lengthy bureaucratic procedure. The depositor had to personally come to the bank, stand in line at the cashier, write a paper application, and only then his money was returned to him.

However, now everything has changed. The depositor can get his money back from the bank by pressing a couple of virtual buttons on his smartphone.

At the same time, panic can theoretically be provoked by any blogger who writes articles on financial issues on the Internet.

HostColor

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The most important thing in 2023 is that the primary causes of the 2007–2008 financial crisis - an enormous amount of poor-quality subprime mortgages spread around the world through derivatives in the balance sheets of poorly capitalized banks — do not apply in 2023. So, it is unlikely to have a major banking crisis in 2023.

Gyfts

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Quote from: be.open on March 16, 2023, 02:29:37 AM

...

These emergency lines of credit are given to the institutions, but not the individuals. Funny how that works.

The government shouldn't be in the business of saving enterprises from their bad investments because it occurs at the tax payers' expense. Contemperaneous to these bailouts, do the taxpayers really have any say on which institution should be bailed out and which ones should collapse? Of course election time, voters have a choice to make their voices heard. But it'll be a little too late by then.

royalfestus

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Quote from: adaseb on March 20, 2023, 11:31:03 PM

If you pull up a monthly chart for CS you will see that it had many issues long time ago. Compare that chart to other banks and you can see that it must of been doing something wrong if the stock kept tanking this much year after year.

About 6 months ago the CDS went very high and many assumed it would default then. However it lived another 6 months before the Silvergate bank closure caused enough panic and bank runs for it to finally fail.

Even the government is not able to provide help because of the prevailing global crisis. Thus, I still believe that the banks failed due to poor management and the prevailing financial crisis in the world. These banks aren't all new and are top-ranking in their countries, providing good interest rates and loans to their citizens. Most citizens now are struggling with debt and are unable to pay it back, resulting in an unbalanced financial situation and bankruptcy

slapper

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100% agreement from this end, my esteemed associate. The financial industry's woes are not solely Europe's, but everyone's concern. When a large financial institution stumbles, the effects reverberate across the entire sector.

It's interesting to see that people are withdrawing from Credit Suisse for the last three months, and now things are even worse. It makes sense that when risk is getting higher, people would move away from banks and invest in more stable assets. The US is helping banks to bail out depositors, but it's still a tough time for the banking sector.

I think you're right that it's best to wait and see what happens next. Trying to predict where the market will move next is a pretty tough game, and it's always changing. But one thing is for sure, this situation is exciting and keeps us all on our toes!

adaseb

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If you pull up a monthly chart for CS you will see that it had many issues long time ago. Compare that chart to other banks and you can see that it must of been doing something wrong if the stock kept tanking this much year after year.

About 6 months ago the CDS went very high and many assumed it would default then. However it lived another 6 months before the Silvergate bank closure caused enough panic and bank runs for it to finally fail.

Die_empty

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The financial crisis experienced by Credit Suisse is a clear indication of the failure of the banking system. This bank has been a living dead for many years because of issues like financial management, poor decision, and fines due to tax invasion scandals. The constant increase of interest rates reveals the emptiness of the bank which led to the withdrawal of funds by its customers. The banking system is not transparent and truthful. Even when it is clear that banks need help, they will keep giving customers false hope that everything is okay. Every day it is getting clearer that the solution to this banking mess is decentralization. It is too risky to put the financial destiny of millions of people in the hands of a few corrupt people.

Alpha Marine

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Quote from: be.open on March 16, 2023, 02:29:37 AM

The Swiss National Bank (SNB), together with the Swiss Financial Market Supervisory Authority, issued a press release stating that the problems of some banks in the US do not pose a risk to Swiss banks. And Credit Suisse has everything in order - it meets the requirements for capital and liquidity.

Well, CS, for its part, immediately announced its intention to get access to the SNB credit line in the amount of $54 billion. "Which will certainly support business and customers."

The collapse of the global financial system is temporarily delayed.

Saying Credit Suisse has everything under control just shows that they have nothing under control. Credit Suisse has not had anything under control for a very long time. They've always been in one scandal or the other. When they're not in scandals they're in one financial trouble or the other. This is not the first time they're in a mess, the only difference is this time around they're in a very big mess. It's a surprise it took them so long to get to this level because they lost the trust of the public a long time ago.

DainSLane

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Thank you for sharing your insights about the problem with Credit Suisse events affecting and the wider banking sector. The situation does indeed seem concerning, especially with the delay of the annual report and weaknesses in internal control being identified. It's important for investors to keep a close eye on developments and assess the risks carefully before making any investment decisions. It's also good advice to exercise caution and wait for more information before taking any action, as the market can be unpredictable.Overall, it's important for investors to carefully evaluate the risks and potential rewards of investing in the banking sector, and to stay informed about developments that may impact their investments. Thank you again for sharing your thoughts.

davis196

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Quote

But could we truly trust their press releases saying that everything is "secure, and safe"? I believe not, and we simply shouldn't trust them. Everyone should get their money out. Because, why would they need a $54 billion credit line?

The first clues that came out about Credit Suisse's problems were back during February, and I believe that it will not be the last.

Plus did you know that the Federal Reserve can also give credit lines to eligible FOREIGN BANKS?

1.The thing you are describing is called "bank run" or "bank panic" and I wouldn't recommend it to anyone, who has deposited any money in a bank.
If everyone gets their money out of Credit Swiss, the bank will have to default. Most depositors probably won't get their money back, unless their deposits aren't guaranteed by the government. Credit Swiss will get help from the Swiss central bank and they will have enough liquidity to payout some deposits(and maybe some short term debts) so that the possibility of a bank run will be neutralized.
2.The Federal Reserve could lend money to whoever they want, even to foreign banks. I don't see a problem here. Lending money isn't the same as giving money away for free. Grin

Wind_FURY

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Quote from: be.open on March 16, 2023, 02:29:37 AM

Quote from: crypticj on March 15, 2023, 10:23:58 PM

I think you all noticed that the stock market went down again and this time it's because of Credit Suisse.
It is still one of the biggest banks in Europe so the European banking sector has some problems too.

Their bonds, CDS, everything is going down and it's bad news not just for people from Europe but for everyone cos this is international.

Credit Suisse had some problems in previous years but this time it's wild. They delayed their annual report and announced that they have weaknesses in internal control which is awful for the bank. And the largest shareholders started saying that they won't give any money to Credit Suisse. People are withdrawing from this bank for the last 3 months but now it's got even worse.

Because risk is getting higher, people move away from banks to invest in more stable assets. The US is helping banks to bail out depositors but banks still have to keep credit flowing which is pretty hard considering the loss of trust in this sector.

I think the best decision right now is to wait for what will happen next because it's pretty hard to predict where the market will move next.

The Swiss National Bank (SNB), together with the Swiss Financial Market Supervisory Authority, issued a press release stating that the problems of some banks in the US do not pose a risk to Swiss banks. And Credit Suisse has everything in order - it meets the requirements for capital and liquidity.

Well, CS, for its part, immediately announced its intention to get access to the SNB credit line in the amount of $54 billion. "Which will certainly support business and customers."

The collapse of the global financial system is temporarily delayed.

But could we truly trust their press releases saying that everything is "secure, and safe"? I believe not, and we simply shouldn't trust them. Everyone should get their money out. Because, why would they need a $54 billion credit line?

The first clues that came out about Credit Suisse's problems were back during February, and I believe that it will not be the last.

Plus did you know that the Federal Reserve can also give credit lines to eligible FOREIGN BANKS?

Quote

Borrower Eligibility: Any U.S. federally insured depository institution (including a bank, savings association, or credit union) or U.S. branch or agency of a foreign bank that is eligible for primary credit (see 12 CFR 201.4(a)) is eligible to borrow under the Program.

https://www.federalreserve.gov/newsevents/pressreleases/files/monetary20230312a1.pdf

"U.S. Branch", OK!

Cool

be.open

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Quote from: crypticj on March 15, 2023, 10:23:58 PM

I think you all noticed that the stock market went down again and this time it's because of Credit Suisse.
It is still one of the biggest banks in Europe so the European banking sector has some problems too.

Their bonds, CDS, everything is going down and it's bad news not just for people from Europe but for everyone cos this is international.

Credit Suisse had some problems in previous years but this time it's wild. They delayed their annual report and announced that they have weaknesses in internal control which is awful for the bank. And the largest shareholders started saying that they won't give any money to Credit Suisse. People are withdrawing from this bank for the last 3 months but now it's got even worse.

Because risk is getting higher, people move away from banks to invest in more stable assets. The US is helping banks to bail out depositors but banks still have to keep credit flowing which is pretty hard considering the loss of trust in this sector.

I think the best decision right now is to wait for what will happen next because it's pretty hard to predict where the market will move next.

The Swiss National Bank (SNB), together with the Swiss Financial Market Supervisory Authority, issued a press release stating that the problems of some banks in the US do not pose a risk to Swiss banks. And Credit Suisse has everything in order - it meets the requirements for capital and liquidity.

Well, CS, for its part, immediately announced its intention to get access to the SNB credit line in the amount of $54 billion. "Which will certainly support business and customers."

The collapse of the global financial system is temporarily delayed.

crypticj

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I think you all noticed that the stock market went down again and this time it's because of Credit Suisse.
It is still one of the biggest banks in Europe so the European banking sector has some problems too.

Their bonds, CDS, everything is going down and it's bad news not just for people from Europe but for everyone cos this is international.

Credit Suisse had some problems in previous years but this time it's wild. They delayed their annual report and announced that they have weaknesses in internal control which is awful for the bank. And the largest shareholders started saying that they won't give any money to Credit Suisse. People are withdrawing from this bank for the last 3 months but now it's got even worse.

Because risk is getting higher, people move away from banks to invest in more stable assets. The US is helping banks to bail out depositors but banks still have to keep credit flowing which is pretty hard considering the loss of trust in this sector.

I think the best decision right now is to wait for what will happen next because it's pretty hard to predict where the market will move next.

Topic: The problem with Credit Suisse and banking sector. (Read 233 times)