HSBC have bought the UK arm of SVB - all monies safe, business as usual this morning.
Now to the US
Current affairs effect this morning is negative stocks positive bonds - risk off.
Reason is Credit Suisse - long story short is the headline “Credit Suisse Saudi baclers say no more money”.
What was actually said by Saudi National Bank’s chairman was
“I don’t think they will need extra money; if you look at their ratios, they’re fine. And they operate under a strong regulatory regime in Switzerland and in other countries,”
In normal circumstance comments that would have little effect on the market but right now not normal times.
There needs to be more positive proactive approach - a market reacting to fear can lead to bad consequences.
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Further to yesterday evenings announcement from the Swiss Nat Bank to the effect that we will back you - Credit Suisse are to receive 50bn from the SNB.
What will they do with that 50bn?
Put it like this - I’d rather not be short that stock right now.
That’s a first step in positive/proactive action by a CB.
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Next step is to encourage a takeover by a profitable bank - that has been confirmed this evening - UBS are the new owners - 100bn made available by SNB for liquidity.
Shareholders have little say - new law to by-pass a vote likely already passed, if not then soon.
First offer was rejected by the board, 2nd offer is double and final - passed.
What about the closing price Friday which was SFR 1.85?
Deduct 1.30 - hindsight is a great teacher so wonder is there a lesson for the largest shareholder.
Anyways come tomorrow morning a certain amount of fear will have been lifted - legislature and business working together can be proactive and positive?
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