The value of the shares in Credit Suisse fell by 24 percent yesterday as a result of fears that the bank would collapse, less than a week after the banking collapse in the United States. The share crash yesterday led to a large stock market fall in Europe, and in Norway the main index on Oslo Børs ended down 3.74 per cent. Today the shares in Credit Suisse ended up with 19 percent again, after the Swiss central bank made it clear that they will come to the bank’s aid with a loan of NOK 577 billion. It also went up for several of the European stock exchanges on Thursday. In London, the stock market ended up with 0.9 percent, in Frankfurt with 1.6 percent and in Paris with as much as 2 percent, reports the AFP news agency. The day also ended in the green on Wall Street, where the leading Nasdaq index was up 2.48 percent at the close. The Dow Jones index was up 1.17 and the S&P index was up 1.76 percent. Stockbrokers on the Frankfurt stock exchange, follow the development on Thursday 16 March. Photo: KAI PFAFFENBACH / Reuters On Thursday afternoon, it also became clear that the European Central Bank is raising interest rates by 0.5 percentage points. This surprises the markets, where many had expected 0.25 percentage points. The goal of recent interest rate increases has been to overcome price inflation, which is the ECB’s main task. At the same time, the bank also has responsibility for financial stability. As a result, ECB chief Christine Lagarde must balance the austerity measures so that increased interest rates do not add up to what already looks like an incipient financial crisis. – Resilient On Oslo Børs, the main index was up 0.9 per cent just after opening. The other European stock exchanges also start the day with green figures. At 2.20 pm, Oslo Børs’ main index was down by 0.96 per cent. – The banking sector in the eurozone is resilient, with strong capital and liquidity positions, writes the ECB in a statement. At the same time, it says that the ECB “closely monitors tensions in the market and stands ready to respond with the necessary measures to preserve price stability and financial stability in the eurozone”. It is the sixth time since July that the ECB has raised interest rates. – The authorities will go to great lengths The turmoil in the major Swiss bank was triggered by the fact that the Saudi Arabian main shareholder in Credit Suisse stated that it was not appropriate to give the bank more financial assistance. – This loan illustrates that the authorities around the world are willing to go to great lengths to secure the banks so that we avoid a banking crisis and bank bankruptcies, says chief analyst at Nordea Erik Bruce. Credit Suisse in Lugano, Switzerland. Photo: ISMAIL BURAK AKKAN / news He says Credit Suisse is a system-critical bank and subject to strict regulation. A bank the authorities will go to great lengths to save. – This is a large bank which, if it were to collapse, would have completely different consequences, says Bruce. – No general banking crisis Despite the bank collapses in the US and the stock crash for Credit Suisse. Chief analyst at Nordea Erik Bruce does not think we are facing a major financial crisis. – Banks depend on trust from owners, depositors and lenders. It is that trust that is now slightly weakened with what has happened in the US and unrest around the entire banking situation. – I do not think we are facing a general crisis because the banks are not losing out on lending to businesses and consumers. That is the usual justification when there is a general banking crisis. The news about the crisis loan to Credit Suisse is described by the UK’s Finance Minister Jeremy Hunt as “encouraging” Erik Bruce in Nordea. Photo: Moment Studio Bruce says the uncertainty now is due to the banks sitting on large holdings of government bonds which have lost value due to interest rate increases. – But this is something the authorities can handle. They can lend the banks money against these safe bonds, and then the problem becomes much smaller. Therefore, I think we are facing manageable problems, says Bruce to news. Bruce believes the loan from the Swiss central bank will have a calming effect on the market. – I think it will open positively today because of the rescue operation. But I think it’s going to be very uncertain in the coming weeks. If we get bad news about banks elsewhere, it will have much greater consequences than normal, says Bruce to news. When the Swiss stock exchange opened on Thursday, Credit Suisse shares soared by 32.6 percent. UPDATED 08.41: In an earlier version of this article, we wrote that Credit Suisse fell by more than 30 percent on the stock exchange on Wednesday. The correct thing is that for a period the share was down over 30 per cent, but ended with a decline of 24 per cent.
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The European Central Bank raises interest rates by 0.5 percent – news Urix – Foreign news and documentaries
