Swiss bank Credit Suisse was rescued, investors breathed a sigh of relief

In recent days, the risk of bankruptcy and loss of liquidity of Swiss bank Credit Suisse due to massive withdrawal of money by customers has made investors worried about a wave of crisis in the financial industry. However, the agreement between UBS and Credit Suisse has somewhat reduced investors' worries this week.

Specifically, just last weekend, UBS agreed to buy Credit Suisse for $3.23 billion. This is a deal backed by the Swiss government to avoid causing an impact on the global banking industry.

Investors breathe a sigh of relief after Credit Suisse was rescued by UBS (Photo TL)

Despite the rescue deal from UBS, the news of Credit Suisse’s bankruptcy wiped out 53% of its value on the US stock market. Meanwhile, UBS, the unit taking over Credit Suisse, reversed course and recorded a 3.3% increase.

The instability in the global banking system in recent weeks has significantly affected the Fed's ability to raise interest rates. For example, another bank, First Republic Bank, has had its credit rating downgraded to "junk" status by S&P Global. In addition, this unit also assessed that the $30 billion in support from 11 other banks to First Republic Bank is unlikely to solve the problem.

The above uncertainties have changed investors' expectations, predicting that the FED will likely raise interest rates by 0.25% or even not raise interest rates.

In addition, UBS's rescue of Credit Suisse has also impacted many world stock markets. At the end of the trading session on March 20, the Dow Jones index increased by 382.60 points (+1.20%), to 32,244.58 points. The S&P 500 index increased by 34.93 points (+0.89%), to 3,951.57 points. The Nasdaq Composite index increased by 45.02 points (+0.39%), to 11,675.54 points.

European stocks also recorded positive signals for the banking industry. The STOXX 600 index in Europe in the session of March 20 also increased by 0.98% to 440.6 points.

Regarding the UBS takeover of Credit Suisse, Danni Hewson, head of financial analysis at AJ Bell, said: "UBS's quick takeover of Credit Suisse, which prevented the bank from collapsing, is the opposite of government bailouts or clear regulations, which makes the market feel more optimistic about the state of the banking sector."

Source: https://www.congluan.vn/ngan-hang-thuy-si-credit-suisse-duoc-giai-cuu-gioi-dau-tu-tho-phao-nhe-nhom-post240117.html