Swiss authorities reveal Credit Suisse’s liquidity lifeline According to Reuters

© Reuters. FILE PHOTO: The logo of Swiss bank Credit Suisse is seen in front of a branch office in Bern, Switzerland November 29, 2022. REUTERS/Arnd Wiegmann/File Photo

By Noele Illien

ZURICH (Reuters) – Swiss authorities revealed the interest rate Credit Suisse and UBS will pay on the 250 billion Swiss francs ($273.31 billion) emergency bailout that Swiss banks have been offered.

Credit Suisse will pay interest at the Swiss National Bank’s current policy rate of 1.5% plus 0.5% to access the central bank’s emergency liquidity assistance (ELA) program. said on Thursday.

Credit Suisse said in early March that it planned to borrow up to 50 billion francs on a basis that requires the loans to be secured by collateral in the form of mortgages and mortgage-backed securities.

In measures announced alongside rival UBS’ emergency takeover of Credit Suisse, designed by the government, the two banks were also granted access to 100 billion francs in additional liquidity assistance (ELA+).

This central bank support is available to banks at an interest rate of 3% plus the policy rate.

To help mitigate the impact of massive outflows, Credit Suisse was also given access to an additional public liquidity reserve of 100 billion francs, for which it had to pay a 3% risk premium. split equally between the national bank and the Swiss state.

In addition, Credit Suisse owes Switzerland a 0.25% commitment premium on the public liquidity stop.

($1 = 0.9147 Swiss francs)

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