According to a recent tweet from Bloomberg, Credit Suisse has met its demise. The bank’s tumultuous history, riddled with scandals, legal troubles, and leadership shakeups, has ultimately led to its downfall.
According to a recent tweet from Bloomberg, Credit Suisse’s stock has plummeted by over 95% since its pre-financial crisis peak. The firm’s current valuation is a modest 7.4 billion Swiss francs ($8 billion) as of Friday’s close.
Credit Suisse Group AG, a renowned investment bank and financial services firm, has symbolized Swiss excellence for over 166 years. However, the bank has recently experienced a series of leadership changes, resulting in a revolving door of senior management and increased pressure on performance. Despite these challenges, Credit Suisse remains committed to delivering exceptional financial services to its clients.
In 1990, the bank’s foray into risky business was sparked by the infamous “burning bed” incident. As per the report, Credit Suisse’s then-CEO Rainer Gut had influenced their US partner, First Boston, to provide a modest capital injection to support bad loans. This move led to First Boston venturing into the highly profitable debt markets of the 1980s and lending billions for buyout transactions. However, the industry’s collapse left the bank in shambles.
Following his appointment as successor, Lukas Muehlemann made strategic acquisitions, including Winterthur Insurance in 1997 and Donaldson, Lufkin & Jenrette in 2000. However, Bloomberg notes that the latter proved to be a costly mistake. Fast forward to January 2019, a highly publicized feud between CEO Tidjane Thiam and Iqbal Khan resulted in a scandal that severely damaged the reputation of the Swiss bank.
The financial institution, renowned for its commitment to confidentiality and fostering a work environment where individual egos superseded moral and legal limits, was under scrutiny following the Thiam-Khan incident. As a result of the investigation conducted by the banking regulatory body, it was revealed that the bank had engaged in five more instances of surveillance between 2016 and 2019.
In the latter part of 2021, Credit Suisse encountered a significant setback as its primary patron, Bill Hwang’s hedge fund Archegos Capital Management, collapsed, resulting in a staggering $5.5 billion loss. Despite the efforts of the newly appointed Chairman Axel Lehmann and CEO Ulrich Koerner, who proposed a return to the bank’s Swiss heritage as the optimal path forward, the desired outcome was not achieved within the expected timeframe.
The current crisis faced by fractional reserve banking systems, including SVB and Credit Suisse, has resulted in a surge in crypto prices. As per Coinmarketcap, Bitcoin has reached a nine-month high, with investors seeking refuge in cryptocurrencies amidst the panic.
The cryptocurrency world is exciting as Bitcoin experiences a remarkable surge, reaching an impressive $28,474 – a staggering 26% increase from last week. This remarkable growth is a testament to the resilience and potential of this digital currency, which has seen an impressive 35% increase in just ten days. Meanwhile, Ethereum, the second-largest cryptocurrency, is also making waves, reaching a seven-month high of $1,846.50. These developments clearly indicate the growing interest and confidence in the cryptocurrency market, and we can expect to see more exciting products in the near future.
