ICSM Business News: banking jitters continue as UBS rescues Credit Suisse triggering fears for business and jobs in the UK
By Harry Mottram: The collapse of two USA banks has continued to cause concerns across the banking world despite the major American finance houses feeling the worst is over. Although nobody thinks this is 2008 all over again Goldman Sachs have reduced their economic forecast for The Eurozone and the UK off the back of the crisis that has now seen the near collapse of Credit Suisse and is rescue by the Union bank of Switzerland (UBS).
Ian Carrotte of ICSM said these were worrying days for businesses as if UBS call in the Credit Suisse loans then a lot of companies could be in trouble. Plus, he said if Credit Suisse are effectively absorbed into UBS then jobs could go in the UK plus suppliers could lose out.
Those words were prompted by news from Reuters who reported: “Credit Suisse said 16 billion Swiss francs ($17.24 billion) of its Additional Tier 1 debt will be written down to zero on the orders of the Swiss regulator as part of its rescue merger with UBS (UBSG.S), angering bondholders on Sunday. FINMA, the Swiss regulator, said the decision would bolster the bank's capital. The move reflects authorities' desire to see private investors share the pain from Credit Suisse's troubles.
On the positive side US markets have stabilised following the demise of Signature Bank and Silicon Valley Bank after jitters have been felt by First Bank, Western Alliance Bancorp and PacWest Bancop have seen falls along with JP Morgan Chase, Citigroup and Bank of America as their value fell. In the UK stock market shares have seen some recovery although commentators are holding their breath in case there’s more bad news yet to come. And with the original crisis started by the US hikes in interest rates it could mean the Bank of England will hold off raising interest rates here. It's wait and see.
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For details for the work of the journalist Harry Mottram visit www.harrymottram.co.uk