In a move that looks more akin to a crime film, Credit Suisse, one of the world’s most respected banking institutions, is the latest to shutter its doors amidst a global banking crisis.
Let’s call it what it is, a banking crisis that was started by bad actors taking on far too much leverage and misappropriating user funds left and right. From the hills of Silicon Valley to the luxury slopes of Switzerland, there was and continues to be mishandling of customer funds.
Where is Credit Suisse now after its fatal collapse?
Credit Suisse is being rescued by UBS. Together, they have made a $3.2 billion deal to rescue Credit Suisse, which should help to ease market concerns caused by the ongoing banking crisis in the United States.
Under the agreement, UBS is purchasing Credit Suisse for 3 billion Swiss francs, which is around 60% less than the bank’s value when markets closed last Friday.
However, the merger could result in the loss of thousands of jobs in the United Kingdom alone, where the two banks employ around 11,000 people.
Credit Suisse and UBS are among the top 30 most important banks in the international monetary system, with almost $1.7 trillion in combined assets.
How Did It All Go Down?
How did we get to where we are now with USB swooping in to save CreditSuisse like Superman coming to the rescue of Lois Lane?
Well, what happened is this: Credit Suisse’s announcement of a “material weakness” in its financial reporting procedures triggered panic among investors.
However, the bank had already been losing investor confidence before this news.
Then out of the blue, the Saudi National Bank, Credit Suisse’s most important shareholder, announced that it would not buy any additional shares in the Swiss bank. This was the real ignition behind the bank run in the European Alps.
The subsequent failures of Silvergate Bank, Silicon Valley Bank, and Signature Bank further exacerbated investor fears, and concerns began to mount that larger banks could also be affected.
Credit Suisse was particularly susceptible to these concerns as one of the world’s largest financial institutions.
How did Crypto respond to the failure of yet another traditional bank that got too greedy and didn’t back their user and client funds?
Well, Cardano’s founder had a few words of irony to give to the bankers of Switzerland.
As it happens, Credit Suisse refused to open an account for Hoskinson back in 2014, when he was the CEO of Ethereum (ETH) and based in Switzerland, with the explanation that cryptocurrencies were too dangerous and unstable to work (isn’t that the kettle calling the pot black?)
Quotes from the Cardano Founder
Specifically, the Cardano founder pointed out the irony of all the troubles that Credit Suisse, and the banking sector as a whole, was going through currently, in the context of its disapproving attitude toward crypto and Hoskinson himself nine years before:
“The Credit Suisse people said, ‘Oh, too dangerous, crypto, we couldn’t possibly consider, it would be so unstable, and so terrible, and we have a reputation to protect, we’re here for the long term, we’ve been here for over 150 years, and we couldn’t embrace this crypto thing,’ and lo and behold, who’s buying Credit Suisse – UBS – only if the Swiss government bails them out.”
Adding to the irony of the bank’s current state and its historical attitude toward crypto, it is also worth mentioning that the former Credit Suisse CEO Tidjane Thiam declared Bitcoin (BTC) “the very definition of a bubble” back in November 2017, arguing that “the only reason (…) to buy or sell Bitcoin is to make money.