The Central Bank of Kuwait has asked local banks to determine if they are exposed to Credit Suisse, the Swiss banking giant and one of the most important banks in the world, and specify the kind and the size of the exposure.
The sources pointed out that the Central Bank’s move towards limiting the investment and financial relationship between Kuwaiti banks and Credit Suisse comes to determine the impact of the risks that could result from this locally, especially after growing global concerns regarding the financial health of Credit Suisse, reports a local Arabic daily.
After more than one international company funded by the bank declared bankruptcy, such as the British “Greensell” and the family wealth management company “Arkegos Capital Management”, Kuwaiti banks are now required to disclose their relationship with Credit Suisse, whether it is financing or investment through the group’s bank or through the wealth management of any of the clients of local banks.
Speculations were fed about an expected collapse of Credit Suisse, similar to the collapse of Lehman Brothers in 2008, and that it might lead to a systemic crisis, due to its involvement in a series of financial scandals that threatened its future, while its market value declined within a year from about 22.3 billion to 10.4 billion dollars.
Credit Suisse shares recently fell 11 percent as the cost of insuring its debt against default rose by about 15 percent to its highest level since 2009.