Credit Suisse accepts $53.9 billion lifeline from Swiss authorities amid financial crisis fears

Swiss investment bank Credit Suisse has accepted a ₣50 billion ($53.9 billion) lifeline from Swiss authorities following concerns of a global financial crisis.

The bank, ranked as the world's eighth-largest, recently identified several "material weaknesses" in its risk assessment strategy in a published annual report. After the Saudi National Bank declined to increase its 10% stake in Credit Suisse, the Swiss Financial Market Supervisory Authority and the Swiss National Bank pledged to "provide liquidity" to the "systemically important" institution if necessary, the Daily Wire reported.

The funds from the Swiss National Bank will enable Credit Suisse to support its core business units and clients as it works to establish a "simpler and more focused bank."

“These measures demonstrate decisive action to strengthen Credit Suisse as we continue our strategic transformation to deliver value to our clients and other stakeholders,” Credit Suisse CEO Ulrich Koerner said in a statement. “My team and I are resolved to move forward rapidly to deliver a simpler and more focused bank built around client needs.”

The bank's annual report acknowledged that the challenging macro and geopolitical environment significantly impacted its performance, resulting in an adverse effect on client activity across all divisions. Credit Suisse saw customers withdraw approximately $119 billion in the fourth quarter of last year due to risk and compliance failures.

Following the announcement of support from Swiss authorities, Credit Suisse's share price rose from $1.76 to $2.14 on Thursday, though it has still fallen by over 83% in the past two years.

The Financial Stability Board considers Credit Suisse one of the 30 "systemically important" banks worldwide, meaning that its failure could trigger a financial crisis.

The difficulties faced by Credit Suisse come shortly after the collapse of Silicon Valley Bank, a major US financial institution. The bank announced a $1.75 billion share sale after suffering significant losses from the liquidation of a $21 billion bond portfolio, which sparked concerns among venture capital firms and startups connected to the institution. The Federal Deposit Insurance Corporation (FDIC) now oversees Silicon Valley Bank's holdings, guaranteeing all deposits in an effort to restore confidence in the financial system.