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Christopher Langner

Credit Suisse's $90 Billion Bitter Pill

Selling illiquid assets to reduce leverage could have a major impact on markets.

One question was left unanswered after Credit Suisse's analyst call on Wednesday: How is the bank going to reduce leverage in its global markets unit to $290 billion from $380 billion by the end of 2016? That's $90 billion of assets that may be unloaded at fire-sale prices. If these positions are illiquid, which some of them seem to be, it could have a major impact on several markets.

To put some context around how aggressive the deleveraging is, consider the fact that Credit Suisse said in its third-quarter report in October it planned to reduce that number to $370 billion by the end of 2018. Chief Executive Officer Tidjane Thiam is speeding things up, considerably.