Destabilizing speculation

Credit Suisse: The Enemy Within

With just over a month to go until the October 27 strategy update, there are already plenty of questions. Among them are whether the details will remain confidential – and whether the bank realizes its only viable future lies in becoming fully Swiss.

Shares of Switzerland’s second-largest bank fell 20% last week. This has never happened before, and it is definitely a cause for concern. Credit Suisse shares are now worth $4 each and their market valuation stands at $11 billion.

Almost everyone knows he has deep issues. The only question is how to get out of the current debacle.

under the radar

So far, there is no indication that it will be able to organize any recovery in the medium term. On the 27th, he wants to present a new strategy. But it’s long until then. Rumors and speculation are rife and while many of them have some entertainment value, they are also incredibly damaging. Just look at the stock price.

Senior management thought they could fly under the radar until the end of October. It was, to say the least, naive and illusory. The Anglo-Saxon media have been reporting for days on what senior management is ostensibly discussing at the top. But the bank thought, again naively, that it could stifle speculation with repeated denials, sweeping everything under the rug.

Not suddenly

But this strategy has just sparked more rumors. It will revive the name “First Boston”. The investment bank will be split into three. A new capital increase is looming. Everything is going to be branded Credit Suisse, whatever that means, as a way to top it all off.

Initially, the bank thought it could avoid trouble by not commenting on all speculation. Now he must realize that it is impossible. That must be why he made the sudden decision to outright deny he was leaving the US market, even though it was against his principles.

Risky situation

The predator has become prey, and now it has no choice but to react to outside pressure. This puts her in a risky situation if she wants to be able to present a new strategy convincingly in about five weeks. It certainly won’t make things any easier.

Another thing is also becoming increasingly clear. Leaks generating headlines come from English-language media. In other words, newspapers such as the “Financial Times” and the “New York Times” or the news agencies “Bloomberg” and “Reuters”. They always seem to be the source of confidential information.

There’s only one way to think about it. It’s Credit Suisse’s senior UK and US executives, who aren’t as loyal to the company, who routinely leak information to the media, for whatever reason.

Genuine Swiss bank

This is the other side of the coin for the American side of the bank, which has been the source of so many of its problems. If it is true that it is considering a capital increase, it is probably courting large American investors who have the necessary funds. This makes the recent and destabilizing indiscretions much less surprising given that they ostensibly come from very well-informed individuals.

The drop in market value just makes them more attractive to new investors.

We are still more than a month away from the expected announcement. There are clear questions as to whether the bank can manage to keep everything confidential until then. But perhaps there is still time for Credit Suisse to finally realize that its only realistic future is that of a purely Swiss bank.