What’s Going On… BANK COLLAPSE Suisse Bank & Deutsche Bank
- ECONOMY NEWS
- October 16, 2022
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What’s going on in the banking space, and by that, we mean the continuous declines in the Suisses bank and the Deutsche bank? Will the two banks collapse, and what do the experts say about their recent crash?
In today’s video, we will talk about what will happen to the market in case the credit Suisse bank and the Deutsche bank collapse and what caused these disastrous results.
Suisse bank is the second largest bank in Switzerland and is considered to be at the center of market turmoil.
We can say the same about Deutsche Bank. The bank itself is in no better condition, and rumors are saying that the bank is having significant financial issues.
In this video we will reveal what is happening and what are the reasons for the crash.
It almost seems like what happened in the last financial crisis of 2008, when the Lehman Brothers bank collapsed, and from there the whole market fell apart.
Let’s face it, even though both banks are considered the two largest European banks, the extreme market volatility and recent major changes have caused some sort of financial difficulty for them.
In recent years, the Suisse bank has been accused of laundering money for a criminal organization, hiring private detectives to spy on their own employees, facilitating corrupt loans to Mozambique, and the list goes on.
On top of that, in 2021, Credit Suisse took a hard loss estimated at billions of dollars. Plus Since January 2022, the credit Suisse bank has plunged by more than 57%, increasing its common trust issues among its long-time clients.
According to the leaked memo released this week, the bank officials and CEO have urged their employees not to panic amid rumors that the banks will collapse anytime soon.
The last Monday, the bank’s share prices fell more than 11.5% to a low average of $3.3 per share.
The bank executives commented that the memo was a regular memo and nothing worth worrying about.
The Suisse bank’s chief executive, Ulrich Koerner, says that the markets and media are both wrong.
Yet Reuters reports got their hands on the memo copy and it includes two worrying terms, this is a critical moment for the organization and a challenging period. Those were the words that Koerner used to describe the financial difficulty that the bank faces.
Critical and challenging are the exact words that describe the current situation that Ditches bank and Suisse credit.
In terms of liquidity and capital, the Suisse bank is much more suited than the 2008 Lehman Brothers banks.
Market analysts are trying to analyze the significant difference between the two banks and what happened in 2008 and now. And for that reason, the probabilities of a collapse are not that higher. Yet it remains a possibility since the European economy itself is facing a recession threat.
However, at first glance, it seems that the Suisse bank will not collapse as fast as the Lehman Brothers did then. Yet, the leaked memo on Monday raises significant concerns and unanswered questions.
Scandals, low confidence, and declining share prices all contributed to the collapse of rumors. Plus, there is another contributing factor: credit default swaps, which are currently at their 17-year high. That takes us to why we are seeing a rise in the credit default swaps in the Dutche bank, and the reasons are higher interest rates and the all-time 40-year high inflation rate.
That said, there is a solution or a way out for the two banks, but that requires extra capital and fresh investment. Unfortunately for Suisse credit and Dutch Bank, it seems that the two are running out of options, especially fresh investment opportunities.
In terms of the future outlook, a recession probability in the European market has increased.
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