Credit Suisse’s shares soared 30% yesterday after it announced it will move to shore up its finances by borrowing up to nearly $54 billion from the Swiss central bank, bolstering confidence as fears about the banking system moved from the U.S. to Europe.
It was a massive swing from a day earlier, when shares of Switzerland’s second-largest commercial bank plunged 30% on the SIX stock exchange after its biggest shareholder said it would not put more money into Credit Suisse.
That dragged down other European banks after the collapse of some U.S. banks stirred fears about the health of global banks. European bank shares recovered a bit yesterday, with the Euro Stoxx Banks index of 21 leading lenders up 1.6%, following a steep 8.4% drop Wednesday.
Credit Suisse, which was beset by problems long before the U.S. bank failures, said Thursday that it would exercise an option to borrow up to 50 billion francs ($53.7 billion) from the Swiss National Bank.
“This additional liquidity would support Credit Suisse’s core businesses and clients as Credit Suisse takes the necessary steps to create a simpler and more focused bank built around client needs,” the bank said.
