Large U.S. banks view Credit Suisse exposure as manageable -sources

By Lananh Nguyen Tatiana Bautzer, and Saeed Azhar

NEW YORK (Reuters) – Large U.S. banks have managed their exposure to Credit Suisse in recent months and view risks from the lender as contained so far, according to three industry sources on Wednesday who declined to be identified because of the sensitivity of the situation.

Industry sources spoke in front of Swiss financial regulator FINMA. The nation’s central banks stated on Wednesday that the Swiss National Bank would supply Credit Suisse liquidity “if necessary”This was the first time a global bank has done so since the financial crises. Credit Suisse stated in a statement that they were happy with the news.

After the collapse of three U.S. banks, including Signature Bank and Silicon Valley Bank, bank stocks have been on an emotional roller coaster ride. These were the largest and second-largest bank failures in U.S. History. On Monday, U.S. President Joe Biden assured that bank stocks would fall. Then on Tuesday, the market rallied in hopes that the worst of the market turmoil was over.

Credit Suisse shares plunged up to 30.8% Wednesday morning, leading to a 7% fall in the European banking Index. The U.S. Treasury stated that it is closely monitoring Credit Suisse’s situation and is in contact with global counterparts.

A spokesperson from Credit Suisse declined comment.

One source claimed that bankers were more worried about the potential spread of the problems to other banks.

A source said that a bank in the United States is still working with Credit Suisse to be a counterparty. However, it is managing its exposure carefully, which is relatively small.

According to a source familiar the situation, one New York asset manager was assessing its trading counterparty risks with Credit Suisse.

“People are all examining their books, what open positions we have with Credit Suisse,” According to the source.

Two supervisory sources revealed to Reuters that the European Central Bank had contacted banks to inquire about Credit Suisse exposures.

Ulrich Korner, CEO, spoke to Channel News Asia on Wednesday. “We are a strong bank. We are a global bank, under Swiss regulation. We fulfill and basically overshoot all regulatory requirements. Our capital, our liquidity basis is very strong.”

(This story has been rewritten to change the headline “is manageable” To “as manageable”)

(Reporting by Lananh Nguyen and Tatiana Bautzer in New York; additional reporting from Davide Barbuscia; Editing done by Megan Davies and Leslie Adler; Josie Kao

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