Credit Suisse earthquake was generated to divert attention away from USA's banking meltdown. Now the whole world is fixated on Credit Suisse, and they claimed that the collapse of three banks in USA is not problematic for the USA banking sector. The collapse of Credit Suisse, a too big to fail bank, will cause a global financial tsunami. The takeover of Credit Suisee by UBS, termed a 'shotgun merger' for US$3.23 billion managed to avoid the catastrophe, but is it really over? Is US$3.23 billion realistic for such a big bank?
The USA Government had been targeting Credit Suisse, including other Swiss banks like UBS, for decades, over the Swiss Banking System that allows the super rich and drug lords to stash their ill gotten gains, to evade tax and avoid getting caught, into Swiss Banks away from their reach. This is a hard pill to swallow for the US Government. It then enacted laws to make sure the Swiss Banking System falls in line with the USA dictates or face the USA's wrath.UBS had paid US$750 million (if I am not mistaken) in fines and penalties to the US Government over tax fraud charges in 2021, for helping rich USA depositors evade tax. That is not the only occasion.
Credit Suisse biggest shareholders includes the Saudi Families, who thought that Swiss Banks were the safest place to keep their enormous wealth, and to invest in them as well. When Credit Suisse was facing collapse, the Saudis decided not to burrow themselves deeper into the shithole by helping with further investments, and that tells us that the Saudis are waking up to the danger of having too much of their wealth in the hands of the West. They finally saw what happened to the Russians.
After all, Mohammed bin Salman clearly knows sooner or later the USA will settle the score with him and his other families for refusing to increase oil production, and even reducing them. Just a short while ago, the loan facilitation move in Yuan, between Exim Bank of China and the Saudi National Bank is the official signal that trade between China and Saudi Arabia is going to be based on the Yuan or Riyal, and bypassing the US$. This is a big move and do you expect the USA to sit quietly by and watch?
Anonymous
It is reported that small banks in the USA are now not luring depositors. Why are depositors avoiding those small banks and making a beeline towards the 'too big to fail' big banks? That had been the motive of shaking down small banks. Some have argued that SVB going down is just a liquidity issue and could have been saved with help from the authorities. But they choose to let it fall.
ReplyDeleteSome US$23 billion of Credit Suisse AT1 bondholders are now left with toilet papers. US bondholders of Credit Suisse, with US$17 billion in all, are suing the Swiss Government over the total wipeout.