Credit Suisse will borrow up to 50 billion Swiss francs ($54bn) from Switzerland’s central bank to shore up confidence in the troubled lender amid concerns about the health of the global banking system after the collapse of Silicon Valley Bank (SVB).

Credit Suisse said on Thursday the loan from the Swiss National Bank (SNB) would support the bank’s core businesses as it took the “necessary steps to create a simpler and more focused bank built around client needs”.

The Zurich-based lender said it would also buy back about $3bn of its debt.

“This additional liquidity would support Credit Suisse’s core businesses and clients as Credit Suisse takes the necessary steps to create a simpler and more focused bank built around client needs,” the bank said.

Credit Suisse’s shares soared 30 percent on Thursday after the announcement, bolstering confidence as fears about the banking system moved from the United States to Europe.

The announcement comes after Credit Suisse shares lost more than one-quarter of their value amid persistent market jitters in the wake of SVB’s collapse – the biggest bank failure in the United States since 2008.

The stock rout came after the chair of Saudi National Bank, Credit Suisse’s biggest shareholder, said in a television interview on Wednesday the lender would “absolutely not” increase its stake in the bank.

The banking turmoil has cast a shadow over Thursday’s meeting of the European Central Bank. Before the chaos erupted, ECB head Christine Lagarde had said it was very likely the bank would make a large, half-percentage point rate increase to tackle stubbornly high inflation.

Source: Aljazeera

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