1:52 a.m. ET, March 16, 2023
Why do people care about Credit Suisse? The bank is “systemically important”
From CNN’s Allison Morrow
A Credit Suisse Group AG office building at night in Bern, Switzerland, on March 15.
(Stefan Wermuth/Bloomberg/Getty Images)
It’s hard to overstate how big of a deal it would be for Credit Suisse — with its half-trillion dollars in assets and more than 50,000 employees around the world — to collapse.
The failure last week of Silicon Valley Bank and Signature, two much smaller regional lenders, shook investor confidence around the world.
Credit Suisse, one of the largest lenders in Europe, is “much more globally connected with several subsidiaries outside of Switzerland, including in the United States,” wrote Andrew Kenningham, chief economist for Europe at Capital Economics.
Credit Suisse is not just a Swiss problem, but a global problem.”
Credit Suisse is known as a “global systemically important bank” (or “G-SIB” as the cool kids call it).
Once one of these megabanks is in trouble, people start to wonder what is happening to the system and wonder who might be the next to fall.
Even with a financial lifeline from Swiss authorities, there are still plenty of risks and unknowns emanating from Credit Suisse, keeping investors on edge.
The Credit Suisse turmoil indicates that the crisis has not been contained, according to Arthur Wilmarth, a professor at the George Washington School of Law.
“I think it was naive for most people to think that it could be contained with just a few regional banks, because there are clearly still shocks reverberating through our own banking system,” Wilmarth said. “And that suggests that it could potentially spread to banks of very large size.”