Credit Suisse will borrow up to $54 billion from the Swiss central bank after the fall in shares.

Credit Suisse said on Thursday it was taking “decisive action” to shore up its liquidity by borrowing up to US$54 billion from the Swiss central bank after a slide in its shares fueled fears of a wider bank deposit crisis.

The Swiss bank’s problems have shifted the focus of investors and regulators from the United States to Europe, where Credit Suisse led a selloff in bank stocks after its biggest investor said it could not provide more financial support because of regulatory restrictions.

Private banking regulators sought to ease investor fears over Credit Suisse on Wednesday, adding to broader worries sparked by the collapse last week of Silicon Valley Bank and Signature Bank, two mid-sized U.S. firms.

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Asian shares extended Wall Street’s slide on Thursday and investors bought gold, bonds and the dollar, leaving markets on edge ahead of a European Central Bank meeting. An early morning European bank statement helped par some of those losses, although trading was choppy.

Credit Suisse said in a statement early Thursday that it was exercising its option to borrow up to 50 billion Swiss francs ($54 billion) from the Swiss National Bank.

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Investors’ focus is now on any action by central banks and other regulators in Asia to restore confidence in the banking system, as well as any exposure to Credit Suisse by regional businesses.

In a joint statement on Wednesday, Swiss financial regulator FINMA and the country’s central bank sought to ease investor fears about Credit Suisse, saying it was “meeting the capital and liquidity requirements imposed on hysterical critical banks.” They said the bank could get liquidity from the Central Bank if needed.

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Credit Suisse said it welcomed the announcement of support from the Swiss National Bank and FINMA.

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Credit Suisse would be the first major global bank to receive such a bailout since the 2008 financial crisis, although central banks have spread liquidity more generally to banks during times of market stress, including the coronavirus pandemic.

Last week’s SVP death, followed two days later by Signature Bank’s death, sent global bank stocks into a tailspin this week as investors discounted US President Joe Biden’s assurances and emergency steps to give banks more funding.

FINMA and the Swiss central bank said there was no indication of an immediate contagion risk for Swiss institutions from the turmoil in the US banking market.

Earlier, Credit Suisse shares led the European banking index down 7%, while the leading Swiss bank’s five-year credit default swaps (CADS) hit a new record high.

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The investor exodus raised fears of a wider threat to the financial system, and two watchdog sources told Reuters that the European Central Bank had contacted banks to ask about their exposure to Credit Suisse.

The U.S. Treasury also said it is monitoring the situation surrounding Credit Suisse and is in contact with global counterparts, a Treasury spokesman said.

Major banks in the United States have managed their exposure to Credit Suisse in recent months and so far see the risks from the lender as manageable, according to three industry sources, who declined to be identified because of the sensitivity of the situation.

The rapid rise in interest rates has made it harder for some businesses to pay back or service loans, increasing the potential for losses for lenders who are also worried about a recession.

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Traders are now betting that the Federal Reserve, which just last week was expected to accelerate its interest rate hike amid stubborn inflation, may be forced to pause and even reverse course.

Bets on a big rate hike by the European Central Bank also quickly evaporated at Thursday’s meeting as Credit Suisse’s debacle fueled fears about the health of Europe’s banking sector. Money market pricing suggested traders now saw a less than 20% chance of a 50 basis point rate hike at the ECB meeting.

Anxiety over SVP’s demise has also prompted depositors to look for new homes for their cash.

Ralf Hammers, chief executive of Credit Suisse rival UBS, said market turmoil had sent more money its way, and Deutsche Bank chief executive Christian Sewing said the German lender had also seen inflows.

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