Strategist Warns Credit Suisse Next to Collapse — Says ‘There’s a Run on the Bank’ – Economics Bitcoin News
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Credit Suisse, one of the largest banks in Switzerland, is reportedly facing a potential collapse, warns a strategist. According to a recent report by economics news Bitcoin News, the bank is currently experiencing a run, raising concerns about its financial stability.
The news comes amid a tumultuous time for Credit Suisse, which has been facing multiple challenges in recent years. The bank has been struggling to recover from a series of scandals, including the involvement of employees in tax evasion schemes, and a $4.7 billion fine from the US Department of Justice related to its role in the subprime mortgage crisis.
The latest warning about the bank’s stability comes from Paul Gambles, managing director of Singapore-based advisory firm MBMG Group. In an interview with CNBC, Gambles expressed concerns about the bank’s exposure to recent market turmoil, particularly the collapse of the Archegos Capital hedge fund.
According to Gambles, Credit Suisse has been “extremely aggressive” in its dealings with Archegos, which resulted in significant losses for the bank. He added that the bank’s exposure to the troubled hedge fund could result in further losses, leading to a collapse.
Adding to these concerns are reports of a potential credit downgrade from rating agencies, which could further undermine the bank’s financial strength. If this were to happen, it could lead to a “fire sale” of assets as investors scramble to withdraw their funds, exacerbating the bank’s problems.
Despite these concerns, Credit Suisse CEO Thomas Gottstein has expressed confidence in the bank’s ability to weather the storm. In an interview with CNBC, he stated that the bank had a “solid capital position” and was well-prepared to handle market turbulence. He added that the bank was taking steps to address the issues raised by the Archegos collapse, including a review of its risk management procedures.
However, Gambles remains skeptical about the bank’s ability to recover. He warned that a potential collapse of Credit Suisse could have significant consequences for the global financial system, similar to the collapse of Lehman Brothers in 2008. He urged investors to be cautious and consider diversifying their portfolios to mitigate the risks associated with a bank failure.
The warning about Credit Suisse’s potential collapse highlights the fragility of the global financial system, particularly in the current climate of market volatility and uncertainty. As the world continues to grapple with the economic fallout of the pandemic, it is important for investors to remain vigilant and to carefully consider their investment options to avoid potential losses.
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