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CS complied with all regulations, even in the weeks before the bail out. The problem was that customers lost trust in CS and in particular its management and we
by misja111 4y ago
CS complied with all regulations, even in the weeks before the bail out.
The problem was that customers lost trust in CS and in particular its management and were withdrawing all their deposits.
- blitzar 4y agoThey didnt have hold-to-maturity losses like SVB - loss of deposits was just loss of (future) revenue.
- _0w8t 4y agoWhich pointed out that regulating the banks is mostly pointless. They always find loopholes. The only sensible regulation is to make sure that banks never gets too big to fail. This way a bankruptcy will be mostly inconsequential even if the government insures deposits.
- blitzar 4y agoI think this is my point - If Credit Suisse went bust, it is the biggest regulatory failure in banking. The regulations in switzerland are no different to any other bank in the world, likely they were more stringent requirements to hold larger quantities of capital and mark-to-market more instruments on their balance sheet. > make sure that banks never gets too big to fail Well the regulators just took two too-big-to-fail banks and merged them ...
- mpweiher 4y agoBanking used to be very heavily regulated. With good reason. During the early 80s (neoliberalism, Reagan, Thatcher, Kohl, etc.) regulations were relaxed and banking deregulated. The first big bank crisis + bailout (Savings and Loan crisis) followed a year later. Banking is not a regular industry, for a bunch of reasons.
- jeffrallen 4y ago"We found material weaknesses in our reporting, with a result that we cannot issue our annual report as scheduled" does not sound like "complied with all the regulations". The bank run started because failing to make the annual report was the final straw after years of untrustworthy behavior.