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No, the 100B CHF is just to bridge the liquidity. If they didn't provide this then Credit Suisse might need to sell a big chunk of its bond portfolio for furthe
by jcfrei 4y ago
No, the 100B CHF is just to bridge the liquidity. If they didn't provide this then Credit Suisse might need to sell a big chunk of its bond portfolio for further withdrawals - which would incur a big loss compared to holding the bonds until maturity. Same issue and fix as for Silicon Valley Bank. I don't know the terms for accessing this emergency liquidity but I assume it's not going to be cheap.
- londons_explore 4y agoAt market rates, it should cost the same as selling the bonds now. And selling the bonds now would put them in the red. So either they have been given better-than-market rates, or they're pulling some other accounting trick to make it look like there is more of value here than there really is...
- bartvk 4y ago> At market rates, it should cost the same as selling the bonds now. You assume that the spread is zero and that there are actually buyers. But I might be wrong here, I don't know about the liquidity of these bonds.