Credit Suisse to get liquidity backstop if needed, says Swiss National Bank

“Credit Suisse meets the capital and liquidity requirements imposed on systemically important banks,” the Swiss National Bank (SNB) and Finma, Switzerland’s independent financial-markets regulator, said in a joint statement late on Wednesday. “If necessary, the SNB will provide Credit Suisse with liquidity.”

Shares in Credit Suisse slumped by as much as 31 per cent on Wednesday in Zurich trading, and its bonds fell to levels that signal deep financial distress, as persistent doubts over the scandal-ridden lender combined with a global sell-off in banking stocks.

The government, central bank and Finma have been discussing ways to stabilise the bank after a tumultuous day sparked by the firm’s largest investor ruling out increasing its stake, Bloomberg reported earlier.

The options discussed include a separation of the Swiss unit and a tie-up with larger rival UBS Group AG. The Swiss central bank offers funding to banks against collateral as a matter of course, while the government has been working on legislation that would make public funds available for banks being wound down. The joint statement did not specify terms of the SNB liquidity.

Credit Suisse’s American depositary receipts pared losses after the announcement by Swiss authorities. They fell 14 per cent to US$2.16 at the close in New York after sliding as much as 30 per cent.