- Dr. Doom economist Nouriel Roubini said Credit Suisse may be too big to fail and too big to save.
- He told Bloomberg Television that he doubted Switzerland would be able to come up with a bailout.
- The Swiss National Bank said it would provide liquidity to Credit Suisse if needed.
Nouriel Roubini, nicknamed ‘Dr. Doom’ for correctly predicting the 2008 global recession, said the problems at Credit Suisse may be too much for Switzerland to deal with.
The bank’s shares fell as much as 30% on Wednesday after its major shareholder, the Saudi National Bank, refused to invest further. shows that it is rising.
“The problem is that by some standards, Credit Suisse may be too big to fail, but it may also be too big to be saved,” Roubini said. bloomberg tv on wednesday.
“Unlike the United States, [Swiss] The federal system has sufficient resources to formulate a remedy,” he added, referring to Switzerland’s decentralized form of government, which delegates powers to the states.
The warning came hours before that swiss central bank announced that Credit Suisse could count on liquidity support and featured well-capitalized.
Still, Credit Suisse’s financial health is cause for concern after it suffered heavy losses, survived a number of scandals and saw clients withdraw more than $100 billion in assets in the fourth quarter alone. .
Recently, the stability of bank deposits has emerged as a top priority. Silicon Valley Bank’s deposit shortfall last week triggered a sudden collapse after unexpectedly revealing a $1.8 billion loss in its bond portfolio.
Roubini said Credit Suisse has far more assets than SVB had before it collapsed. At the end of the fourth quarter, Credit Suisse’s assets were over $500 billion, more than double that of SVB’s.
“So anything that happens to Credit Suisse will have a systemic impact not only on the European financial system, but also on the global financial system,” he said. “If Silicon Valley Bank is to have a ripple effect on global financial markets, if something bad happens to Credit Suisse, it will be much worse.