How does the fall of Credit Suisse bank affect the cryptocurrency market?

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“Credit Suisse is no more,” Bloomberg reports on Twitter, explaining the downfall of the bank that faced decades of scandals, legal troubles and administrative upheavals.

“Credit Suisse shares are down more than 95% from their pre-financial crisis peak,” the Bloomberg page tweeted, citing that the company was valued at just 7.4 billion Swiss francs ($8 billion) at the end of the month. Friday.

Credit Suisse Group AG was a global investment bank and financial services firm founded and headquartered in Switzerland, becoming an emblem of Swiss pride for 166 years. However, the bank recently suffered from a senior management revolving door that came with leadership changes that put pressure on performance.

Credit Suisse’s risky start

The bank’s risky business began with the “burning bed” incident of 1990. According to the report, “then Credit Suisse CEO Rainer Gut lobbied the bank’s US partner, First Boston, for a modest injection of capital to support bad loans.” Subsequently, Boston ceded to the lucrative debt markets of the 1980s, lending billions to finance purchase transactions. However, the industry imploded, leaving the bank in shambles.

Subsequently, the successor, Lukas Muehlemann, bought Winterthur Insurance in 1997 and then acquired Donaldson, Lufkin & Jenrette in 2000. “This turned out to be a costly misstep,” says Bloomberg. Later, in January 2019, a spat between CEO Tidjane Thiam and Iqbal Khan “developed into a grisly corporate scandal,” Bloomberg reports, which shattered the Swiss bank’s reputation.

The bank, infamous for its discretion and for conveying a culture in which personal vanities exceeded ethical and legal boundaries, was under investigation following the Thiam-Khan episode. The banking regulator uncovered five additional cases of surveillance between 2016 and 2019.

Later in 2021, the bank suffered a $5.5 billion loss when its biggest client Bill Hwang’s Archegos Capital Management hedge fund imploded. Finally, the new leadership duo of Chairman Axel Lehmann and CEO Ulrich Koerner had proposed a return to Credit Suisse’s Swiss roots as the best way forward, but failed to deliver in time.

To end…

Although fractional reserve banking systems like SVB and Credit Suisse are facing a crisis, it is giving cryptocurrency prices a boost. According to coinmarketcapBitcoin is seen at a nine-month high today as panicked investors move into “safe havens” like cryptocurrencies.

Bitcoin has reached its highest jump this year with $28,474, a 26% jump from last week, showing 35% growth in just ten days. Also Ethereum, the second largest cryptocurrency, has a seven-month high of $1,846.

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