Credit Suisse’s Fatal Bank Run Points to Gaps in Liquidity Rules
- Swiss officials emphasized sale to UBS staved off collapse
- Banks’ preparedness to weather crisis now focus of regulators
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Credit Suisse AG was hit by renewed outflows over several days last month that took it to the brink of bankruptcy, even when it was supposed to have enough funds to cover a month of deposit flight.
As Swiss officials and Credit Suisse executives emphasized this week that the firm’s emergency sale staved off imminent collapse, they highlighted how sharp the run was. The bank had 120 billion francs at the end of December to cover the 83 billion francs of net outflows it expected over a brutal 30 days, and said that as of March 14, that ratio had improved. But just a few days later, it was on the brink.