41–48 of 48 posts
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> Swiss government will prop them up Unlikely. The article describes a lender-of-last-resort mechanism more than a bail-out [1]. It comports with the EU's ELA [2]. It's an exorbitant privilege, for sure, but not TBTF. [1] https://www.efd.admin.ch/efd/en/home/the-fdf/nsb-news_list.m... [2] https://www.ecb.europa.eu/pub/pdf/other/ecb.agreementemergen...
I will bet you an adult beverage of your choice if push comes to shove, they will rescue CS.
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> Nor is Credit Suisse going down going to affect normal people or the greater economy. Really? They have 50,000 employees and two million clients.
The global economy will barely blink at that, so long as what's taking Credit Suisse down isn't a more widespread issue (and it doesn't appear to be). Most of those clients will simply move to another bank as needed, there are better alternatives.
“ It has, however, increased salaries.” These guys can’t lose. They either win or win big time even while running their company into the ground. Time for some government bailouts so they can go on a luxury retreat like AIG execs did in 2008.
Most of their compensation does not come from salaries - especially at the exec level. Nor is Credit Suisse going down going to affect normal people or the greater economy. This is not a win for execs, this is a way to placate employees despite half their bonuses disappearing.
Whereas everyone then finds out their employer lost their retirement fund, and has to sell their homes, etc.
So I think people are reasonably concerned about how a bunch of execs screwing up if going impact that non-millionaires.
So, is Credit Suisse considered "too big to fail?" If no, are there any ramifications if it were to collapse? It seems like the writing has been on the wall for a while now, so I would hope preparations have been made and it would not be catastrophic, but it's honestly a little crazy to see a ~170 year old institution getting this close to shuttering.
A bank like Citi in 2008 really was too big to fail without imploding the entire system given the circumstance.
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I hate this simplistic attitude so much. Okay how do you expect the bank to "pull itself by the bootstraps" and not rely on a govermnet bailout? Do you expect bright employees to stay on board or flock in and fix things out of the kindness of their hearts? They have to pay people to keep things from getting worse. And yes they could get worse.
To continue along these lines- If the bank fails everyone looses their jobs. Rich executives will be fine and as it goes down the line the negative impact gets worse. If the government bails out the bank it's saving some jobs and is it possible to make some of that investment back?
They're talking in percentage terms because you'd be shocked if they were talking cash. Traders get million pound bonuses. or more. Goodness knows what a bonus is worth, but I'd be extremely happy with 50% of whatever it is. It might seem odd to be paying bonuses at all, but to be fair, mega bonuses are part of the culture of share trading and if you have no bonuses then you have no traders, they'll go elsewhere.
Shouldn't other companies be wary of hiring traders from a firm with such terrible results?
Credit Suisse is in free-fall. Down 83% in fixed income sales and trading. Down 95% in equities sales and trading. Down by half in M&A. On trial for cocaine dealing. A bank losing all its income and going down in a criminal probe into a coke dealer. It'd be a good SNL skit if there weren't so many lives on the line. It's amazing a bonus pool exists at all.
https://www.reuters.com/business/finance/court-convicts-cred...
"A former employee was found guilty of money-laundering in the trial, which included testimony on murders and cash stuffed into suitcases [...]"
Whew!