‘Critical moment’: Credit Suisse CEO tries to calm staff as speculation swirls

The stress eased over several months as the German firm settled for a lower figure than many feared, raised about €8 billion euros ($12.2 billion) of new capital and announced a strategy revamp. Still, what the bank called a “vicious circle” of declining revenue and rising funding costs took years to reverse.

There are differences between the two situations. Credit Suisse doesn’t face any one issue on the scale of Deutsche Bank’s $US7.2 billion ($11.2 billion) settlement, and its key capital ratio of 13.5 per cent is higher than the 10.8 per cent that the German firm had six years ago.

The stress Deutsche Bank faced in 2016 resulted in the unusual dynamic where the cost of insuring against losses on the lender’s debt for one year surpassed that of protection for five years. Credit Suisse’s one-year swaps are still significantly cheaper than five-year ones.

Last week, Credit Suisse said it’s working on possible asset and business sales as part of its strategic plan which will be unveiled at the end of October. The bank is exploring deals to sell its securitised products trading unit, is weighing the sale of its Latin American wealth management operations excluding Brazil, and is considering reviving the First Boston brand name, Bloomberg has reported.