Credit Suisse - Is it going to go bust, if so what happens?
Discussion
Scootersp said:
Of course i read it but it truely is as simple as, if the money never comes back to the sources that provided it, those sources did bail them out.
Time will tell if CS is a RBS or one of the many others that don't end up costing the original supporter.
Agree time will tell and I am sorry you are in the position you are, CS could turn into an RBS though banks are much stronger than 08/09 because of regs out in place as a result.Time will tell if CS is a RBS or one of the many others that don't end up costing the original supporter.
The point I (and isadiri) are making (obviously not very well) is SNB aren’t giving CS 50bn and hoping it comes back, they are offering a lending facility in return for collateral, if money doesn’t come back they take the collateral.
Gweeds said:
Except it’s a global thing and we all know it.
I’m not defending bank bailouts, just presentation by The Guardian of routine issues faced by any business in these markets and largely the same issue which is KYC / AML.Give me a Credit Union or trad values Building Society any day but it would probably be cheaper or higher return down the road…
Zed Ed said:
Gweeds said:
Incredible to see that rap sheet and yet no exec has seen the inside of a cell.
Again. Every f
king time.
Some/most of those not unexpected in the businesses, products and jurisdictions they operate in. They are a big business , peeps take the pee and things go wrong.Again. Every f
king time.Wealth and International Banking likely more troublesome than the investment bank. Losses are part of banking life.
why? it's mostly been swept under the carpet.
this lot have operated like the mob for years and now the chickens have come home to roost.
Adam. said:
Scootersp said:
Of course i read it but it truely is as simple as, if the money never comes back to the sources that provided it, those sources did bail them out.
Time will tell if CS is a RBS or one of the many others that don't end up costing the original supporter.
Agree time will tell and I am sorry you are in the position you are, CS could turn into an RBS though banks are much stronger than 08/09 because of regs out in place as a result.Time will tell if CS is a RBS or one of the many others that don't end up costing the original supporter.
The point I (and isadiri) are making (obviously not very well) is SNB aren’t giving CS 50bn and hoping it comes back, they are offering a lending facility in return for collateral, if money doesn’t come back they take the collateral.
Gecko1978 said:
Essentially are they not offering liquidity in exchange one assume for either binds the market doesn't want without a big haircut or just a cash injection (or option of one) if they are short. There is no real paying back but the state has given them money but the repayment of that comes in the form.of inflation due to an increase in CHF in the market.
Not really, that money is certainly supposed to be paid back. The SNB providing liqudity to CS is essentially on a repo line which in 'normal' market conitions, CS would be able to tap into to get their required funding from other commercial banks. Obviously with the rather febrile environment now, that's a bit more difficult than usual for CS. As such the SNB can step in to provide that to CS in return for whatever notional of securities being pledged given they have no potential liqudity concerns (as compared to all the other commercial banks who don't want to find themselves short of cash having lent it out to CS) and would therefore not require haircuts as other banks would from CS.Carl_Manchester said:
I started a thread on the Credit Suisse espionage scandal a while back. I have not posted in it for well over a year event though the Swiss regulator still has the bank under investigation.
why? it's mostly been swept under the carpet.
this lot have operated like the mob for years and now the chickens have come home to roost.
The espionage thing looks like a man baby spat from which the obvious conclusion would be to question whether these folk should be running a bank. Fair play to you; it’s not flattering.why? it's mostly been swept under the carpet.
this lot have operated like the mob for years and now the chickens have come home to roost.
Whoozit said:
I'm really sorry, it's definitely not working for you. I agree with isaldari, you seem to have been trapped in Egypt's currency controls. There's a reason back in the day that export guarantees were a calculation in crossborder sales. It doesn't help you now of course. Any way you can hold back product/activation keys/support?
thanks and yes we are currently stuck, just hopeful whilst likely at the back of the queue now we will get to the front one day!I always semi joked about adding a remote login wifi thing (I'm not technical!) that could shut things down, but wouldn't help just yet as it's part of new Cairo city that's not really open, I still think we should have done it on the premise that it could be a remote trouble shooting support feature.
Scootersp said:
skwdenyer said:
Does the export orders guarantee scheme help with situations like this? Or credit insurance?
UKEF we've been in contact with and they may be an option to defer the loan further with if the bank here get twitchy but they only really back the loan and of course they all charge ongoing interest. The bank are having to wait right now as to shut us down takes away that longer term alternative way of getting their money back. Excuse others if I don't see the commercial and central banks as that different, but the way I see it is the banks in their various forms are shafting us, and the one owed money will take that first before we get anything, when as I say the customer supplier relationship is 100% sound, ridiculous really, system is broken once trade payments are interfered with.
Otherwise it is back to the old days of dealing behind the Iron Curtain - find somebody in the UK who wants to buy something in Egypt, and enter into a private currency transaction whereby your buyer settles in Egyptian Pounds, and you do a deal to receive USD/GBP in the UK in return for transfer of the Egyptian Pound balance. In the old days, there used to be brokers who set up such deals - no idea if that still exists.
Scootersp said:
Whoozit said:
I'm really sorry, it's definitely not working for you. I agree with isaldari, you seem to have been trapped in Egypt's currency controls. There's a reason back in the day that export guarantees were a calculation in crossborder sales. It doesn't help you now of course. Any way you can hold back product/activation keys/support?
thanks and yes we are currently stuck, just hopeful whilst likely at the back of the queue now we will get to the front one day!I always semi joked about adding a remote login wifi thing (I'm not technical!) that could shut things down, but wouldn't help just yet as it's part of new Cairo city that's not really open, I still think we should have done it on the premise that it could be a remote trouble shooting support feature.
Adam. said:
Agree time will tell and I am sorry you are in the position you are, CS could turn into an RBS though banks are much stronger than 08/09 because of regs out in place as a result.
The point I (and isadiri) are making (obviously not very well) is SNB aren’t giving CS 50bn and hoping it comes back, they are offering a lending facility in return for collateral, if money doesn’t come back they take the collateral.
Thanks, you made it well enough I think in my higher pessimistic state I'd gone down the path that this might not work, whereas you guys are on the line of thinking that this will stop the rot in it's tracks, essentially be enough. The point I (and isadiri) are making (obviously not very well) is SNB aren’t giving CS 50bn and hoping it comes back, they are offering a lending facility in return for collateral, if money doesn’t come back they take the collateral.
If it isn't and they take the collateral, they are ok (if the value is the same) but presumable CS are in the same/more trouble? and then no one but the central bank is there to help again, which is a bit circular?
skwdenyer said:
Sorry to hear. Not helpful now (and not trying to be wise after the event), but for the future a letter of credit may be worth investigating (and seems to be what the Egyptian Govt is encouraging right now).
Otherwise it is back to the old days of dealing behind the Iron Curtain - find somebody in the UK who wants to buy something in Egypt, and enter into a private currency transaction whereby your buyer settles in Egyptian Pounds, and you do a deal to receive USD/GBP in the UK in return for transfer of the Egyptian Pound balance. In the old days, there used to be brokers who set up such deals - no idea if that still exists.
We did have a % advance, with the bulk via a Letter of credit (which went well but was before the first significant currency devaluation) , then this 20% on open account at the end, which you can imagine is the vast majority of the profit in the job, in fact might be all, considering overruns and all the bank charges we've incurred from loan extensions etc! Otherwise it is back to the old days of dealing behind the Iron Curtain - find somebody in the UK who wants to buy something in Egypt, and enter into a private currency transaction whereby your buyer settles in Egyptian Pounds, and you do a deal to receive USD/GBP in the UK in return for transfer of the Egyptian Pound balance. In the old days, there used to be brokers who set up such deals - no idea if that still exists.
Your second idea is the one someone raised to us, my MD was reticent but I'm minded to try anything right now and it would confirm 100% the main cons commitment to paying/assisting us. Thanks for the confirmation this isn't uncommon, I think the MD was worried it wasn't all above board somehow, obviously there is a trust issue and/or associated costs but at this point I think it's well worth trying, especially initially for a smaller portion, i'll bring it back up, thanks, see if pistonheads can help bail us out!
Scootersp said:
Thanks, you made it well enough I think in my higher pessimistic state I'd gone down the path that this might not work, whereas you guys are on the line of thinking that this will stop the rot in it's tracks, essentially be enough.
If it isn't and they take the collateral, they are ok (if the value is the same) but presumable CS are in the same/more trouble? and then no one but the central bank is there to help again, which is a bit circular?
Don't think one can say that the liquidity line will stop the rot. It definitely helps and should be sufficient for CS (assuming their balance sheet reported numbers are anywhere near what they are said to be) but....... it at least in part depends if market sentiment will continue to remain quite as bearish (ie panicky). SVB and CS troubles in such short order (plus First Republic's rescue just today) is certainly going to incentivise some firms to try to test the limits of what is going to be needed to backstop the various banks.If it isn't and they take the collateral, they are ok (if the value is the same) but presumable CS are in the same/more trouble? and then no one but the central bank is there to help again, which is a bit circular?
Scootersp said:
If it isn't and they take the collateral, they are ok (if the value is the same) but presumable CS are in the same/more trouble? and then no one but the central bank is there to help again, which is a bit circular?
With the greatest of respect you don’t understand banking, like I am sure I don’t understand your business.Simply put banks take deposits (and pay interest) and issue loans and mortgages (and charge interest). The NIM (net interest margin) is the profit it makes from paying less interest than it charges.
They take cash deposits and invest it in (often in high quality stuff like government debt which pays then a return), and use that as collateral to issue loans.
Easy except of liquidity risk - loans and mortgages are longer term, and deposits can be instantly accessed. So banks have liquidity and duration risk.
They manage this through interbank loans, repo markets and central banks lending through the gaps.
Now this is easily manageable in normal times as there are 100s of years of experience which tell banks how sticky deposits are, and regulators don’t allow you to lend out all your deposits. They have to hold a buffer and there is loads of regulation (see Basel) which prevent banks over-stretching).
What SNB are doing is stepping in, to stop a short term confidence issue in those interbank markets. That stops depositors withdrawing cash in a panic, much like the £85k guarantee scheme that makes us worry less about our bank accounts.
Edited by Adam. on Friday 17th March 01:08
Gweeds said:
Except it’s a global thing and we all know it.
I’m not defending bank bailouts, just presentation by The Guardian of routine issues faced by any business in these markets and largely the same issue which is KYC / AML.Give me a Credit Union or trad values Building Society any day but it would probably be cheaper or higher return down the road…
Adam. said:
Scootersp said:
If it isn't and they take the collateral, they are ok (if the value is the same) but presumable CS are in the same/more trouble? and then no one but the central bank is there to help again, which is a bit circular?
With the greatest of respect you don’t understand banking, like I am sure I don’t understand your business.Simply put banks take deposits (and pay interest) and issue loans and mortgages (and charge interest). The NIM (net interest margin) is the profit it makes from paying less interest than it charges.
They take cash deposits and invest it in (often in high quality stuff like government debt which pays then a return), and use that as collateral to issue loans.
Easy except of liquidity risk - loans and mortgages are longer term, and deposits can be instantly accessed. So banks have liquidity and duration risk.
They manage this through interbank loans, repo markets and central banks lending through the gaps.
Now this is easily manageable in normal times as there are 100s of years of experience which tell banks how sticky deposits are, and regulators don’t allow you to lend out all your deposits. They have to hold a buffer and there is loads of regulation (see Basel) which prevent banks over-stretching).
What SNB are doing is stepping in, to stop a short term confidence issue in those interbank markets. That stops depositors withdrawing cash in a panic, much like the £85k guarantee scheme that makes us worry less about our bank accounts.
Edited by Adam. on Friday 17th March 01:08
"The point I (and isadiri) are making (obviously not very well) is SNB aren’t giving CS 50bn and hoping it comes back, they are offering a lending facility in return for collateral, if money doesn’t come back they take the collateral."
your detail explanation doesn't seem to go as far as your final sentence above, if the money doesn't come back SNB take the collateral, so you imply they have no risk, they get the money or collateral where does that leave CS?
Scootersp said:
Before I said the above you said
"The point I (and isadiri) are making (obviously not very well) is SNB aren’t giving CS 50bn and hoping it comes back, they are offering a lending facility in return for collateral, if money doesn’t come back they take the collateral."
your detail explanation doesn't seem to go as far as your final sentence above, if the money doesn't come back SNB take the collateral, so you imply they have no risk, they get the money or collateral where does that leave CS?
The aim was to give CS enough liquidity to counter any relative lack of liquidity from the market driven by a lack of trust. "The point I (and isadiri) are making (obviously not very well) is SNB aren’t giving CS 50bn and hoping it comes back, they are offering a lending facility in return for collateral, if money doesn’t come back they take the collateral."
your detail explanation doesn't seem to go as far as your final sentence above, if the money doesn't come back SNB take the collateral, so you imply they have no risk, they get the money or collateral where does that leave CS?
However overnight the FT reports the Swiss and other regulators are exploring it being bought by UBS. At this point perhaps there is no trust to be won back. It's looking a lot like the slow rolling bank recaps I was involved in a decade ago.
Zed Ed said:
Gweeds said:
Except it’s a global thing and we all know it.
I’m not defending bank bailouts, just presentation by The Guardian of routine issues faced by any business in these markets and largely the same issue which is KYC / AML.Give me a Credit Union or trad values Building Society any day but it would probably be cheaper or higher return down the road…
None of this is new news
https://www.bbc.co.uk/news/business-27478532
The fall of Credit Suisse has been like the death of a 1000 cuts….its really been a 15 year deterioration.
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