5 ms·

Any predictions on if they'll just let this bank implode naturally? I feel like we are close on the verge of a event that sets off the recession. It feels like

Any predictions on if they'll just let this bank implode naturally? I feel like we are close on the verge of a event that sets off the recession. It feels like the banking sector is going to be the fuse again.

theandrewbailey 4y ago
[flagged]
- MrMan 4y ago
  do you know what you are talking about or are you just being dramatic
esja 4y ago
Not a chance of a natural implosion. CS is one of a very small number of globally systemically important banks.
- neximo64 4y ago
  CS stopped being globally systemically important a decade ago. More and more so by selling off pieces of the bank the past few years
  - tootie 4y ago
    They've dropped in the rankings but still have over $1T AUM. Far bigger than SVB.
    - Scoundreller 4y ago
      I think the AUM comparison is something everyone needs to be careful of. Vanguard has a lot of AUM from me (from my point of view anyway), but it’s (hopefully) 100% passed through to security issuing organizations. They only get to rake a fraction of a percent from me for their operations. Wayyyyy different than a bank with $billions in checking and savings accounts where they can do ??? with it.
  - resource0x 4y ago
    Wikipedia disagrees with you. CS is listed among 30 global systemically important banks. https://en.wikipedia.org/wiki/List_of_systemically_important_banks https://en.wikipedia.org/wiki/List_of_systemically_important...
    - moffkalast 4y ago
      [flagged]
      - esja 4y ago
        You could always ask the Financial Stability Board: https://www.fsb.org/2022/11/2022-list-of-global-systemically-important-banks-g-sibs/ https://www.fsb.org/2022/11/2022-list-of-global-systemically...
      - revscat 4y ago
        They are more likely to speak the truth than some random cynic on HN.
      - ramblerman 4y ago
        As opposed to "that guy on the internet board said so" ?
        DiogenesKynikos 4y ago
        Wikipedia is also "that guy on the internet board."
        ramblerman 4y ago
        Lol, that's a very pessimistic take. 1. Wikipedia articles are generally not single author 2. they list sources for their important claims Such as in this case - The top 30 claim comes from the Financial Stability Board, which they linked to [1] [1] https://www.fsb.org/wp-content/uploads/P211122.pdf https://www.fsb.org/wp-content/uploads/P211122.pdf
  - esja 4y ago
    They are a bit less important than they once were in terms of volume, but they are still massively interconnected with the rest of the system. There is zero chance they‘re just left to implode without governments and central banks stepping in.
    - neximo64 4y ago
      They'll just disappear and the pieces of it be sold off. They're not that interconnected anymore since they've been selling everything the past few years.
  - IAmGraydon 4y ago
    >CS stopped being globally systemically important a decade ago. I don't know if you've looked at the market this morning, but it disagrees with you.
  - david927 4y ago
    Princeton University Professor of Economics Alan Blinder said literally the opposite on Bloomberg today.
- gjvc 4y ago
  [flagged]
- seydor 4y ago
  We are all globally systemic. We are the world. We are the children
rootsudo 4y ago
That's what the newscycle and everyone else is spinning it as. So, most likely it's just a slow moving crash that we're witnessing but it already happened.
tootie 4y ago
I think a relevant question is who is "they" in this case. We've talked endlessly about the US Treasury and the Fed, but CS is based in Switzerland. A country with a long and storied history of banking independence. The US and EU aren't going to stand by and do nothing since our businesses likely have major exposure but one would hope the Swiss would deal with this appropriately.
- esja 4y ago
  CS operates in 50+ countries. All the largest entities have resolution/winddown plans agreed with their regulators. In reality they probably won’t be used because the SNB and Fed will fear contagion.
  - config_yml 4y ago
    The resolution process is outlined by FINMA, this was all defined after 2008 and the bailout of UBS: https://www.finma.ch/en/enforcement/recovery-and-resolution/too-big-to-fail-and-financial-stability/banks’-recovery-and-resolution-planning/ https://www.finma.ch/en/enforcement/recovery-and-resolution/...
    - esja 4y ago
      Yes, but the SNB and FINMA (and the Federal government) will try many other things before it comes to that.
- BeFlatXIII 4y ago
  I hope the Swiss will let it fail. That's appropriate.
madaxe_again 4y ago
No, the taxpayers will foot the bill. Can’t have bank CEOs missing out on their hundred million dollar compensation, that would ruin the system! It’ll just be 2008 all over again - the people who screwed up will be rewarded, everyone else will be punished.
celestialcheese 4y ago
Swiss govt is signaling they will backstop it. https://www.ft.com/content/0324c5a6-cecd-4fb3-85b3-7cdc99a33e4e https://www.ft.com/content/0324c5a6-cecd-4fb3-85b3-7cdc99a33...

theandrewbailey 4y ago

[flagged]

MrMan 4y ago
do you know what you are talking about or are you just being dramatic

esja 4y ago

Not a chance of a natural implosion. CS is one of a very small number of globally systemically important banks.

neximo64 4y ago
CS stopped being globally systemically important a decade ago. More and more so by selling off pieces of the bank the past few years
- tootie 4y ago
  They've dropped in the rankings but still have over $1T AUM. Far bigger than SVB.
  - Scoundreller 4y ago
    I think the AUM comparison is something everyone needs to be careful of. Vanguard has a lot of AUM from me (from my point of view anyway), but it’s (hopefully) 100% passed through to security issuing organizations. They only get to rake a fraction of a percent from me for their operations. Wayyyyy different than a bank with $billions in checking and savings accounts where they can do ??? with it.
- resource0x 4y ago
  Wikipedia disagrees with you. CS is listed among 30 global systemically important banks. https://en.wikipedia.org/wiki/List_of_systemically_important_banks https://en.wikipedia.org/wiki/List_of_systemically_important...
  - moffkalast 4y ago
    [flagged]
    - esja 4y ago
      You could always ask the Financial Stability Board: https://www.fsb.org/2022/11/2022-list-of-global-systemically-important-banks-g-sibs/ https://www.fsb.org/2022/11/2022-list-of-global-systemically...
    - revscat 4y ago
      They are more likely to speak the truth than some random cynic on HN.
    - ramblerman 4y ago
      As opposed to "that guy on the internet board said so" ?
      - DiogenesKynikos 4y ago
        Wikipedia is also "that guy on the internet board."
        ramblerman 4y ago
        Lol, that's a very pessimistic take. 1. Wikipedia articles are generally not single author 2. they list sources for their important claims Such as in this case - The top 30 claim comes from the Financial Stability Board, which they linked to [1] [1] https://www.fsb.org/wp-content/uploads/P211122.pdf https://www.fsb.org/wp-content/uploads/P211122.pdf
- esja 4y ago
  They are a bit less important than they once were in terms of volume, but they are still massively interconnected with the rest of the system. There is zero chance they‘re just left to implode without governments and central banks stepping in.
  - neximo64 4y ago
    They'll just disappear and the pieces of it be sold off. They're not that interconnected anymore since they've been selling everything the past few years.
- IAmGraydon 4y ago
  >CS stopped being globally systemically important a decade ago. I don't know if you've looked at the market this morning, but it disagrees with you.
- david927 4y ago
  Princeton University Professor of Economics Alan Blinder said literally the opposite on Bloomberg today.
gjvc 4y ago
[flagged]
seydor 4y ago
We are all globally systemic. We are the world. We are the children

rootsudo 4y ago

That's what the newscycle and everyone else is spinning it as. So, most likely it's just a slow moving crash that we're witnessing but it already happened.

tootie 4y ago

I think a relevant question is who is "they" in this case. We've talked endlessly about the US Treasury and the Fed, but CS is based in Switzerland. A country with a long and storied history of banking independence. The US and EU aren't going to stand by and do nothing since our businesses likely have major exposure but one would hope the Swiss would deal with this appropriately.

esja 4y ago
CS operates in 50+ countries. All the largest entities have resolution/winddown plans agreed with their regulators. In reality they probably won’t be used because the SNB and Fed will fear contagion.
- config_yml 4y ago
  The resolution process is outlined by FINMA, this was all defined after 2008 and the bailout of UBS: https://www.finma.ch/en/enforcement/recovery-and-resolution/too-big-to-fail-and-financial-stability/banks’-recovery-and-resolution-planning/ https://www.finma.ch/en/enforcement/recovery-and-resolution/...
  - esja 4y ago
    Yes, but the SNB and FINMA (and the Federal government) will try many other things before it comes to that.
BeFlatXIII 4y ago
I hope the Swiss will let it fail. That's appropriate.

madaxe_again 4y ago

No, the taxpayers will foot the bill. Can’t have bank CEOs missing out on their hundred million dollar compensation, that would ruin the system! It’ll just be 2008 all over again - the people who screwed up will be rewarded, everyone else will be punished.

celestialcheese 4y ago

Swiss govt is signaling they will backstop it. https://www.ft.com/content/0324c5a6-cecd-4fb3-85b3-7cdc99a33e4e https://www.ft.com/content/0324c5a6-cecd-4fb3-85b3-7cdc99a33...