The banking collapse which began last week with uninsured-deposit-reliant institutions in the U.S. has metastasized into other global financial institutions. Case in point—Credit Suisse. The cost of insuring its bonds against default in the near-term has approached a rarely seen level signaling serious investor concerns.
“In the case of an interconnected bank like Credit Suisse,” Hedgeye Financials analyst Josh Steiner explains on this clip from The Call @ Hedgeye, “you worry not just about deposit outflows and loss of AUM on the wealth management side, but also about institutional counter-parties pulling back.”
Credit default swaps increased another 58-basis points day over day into the 600s Wednesday. Shares of Credit Suisse ($CS), one of the world’s largest investment banks have plunged approximately 25% today.
“Obviously, there are a lot of problems there,” Steiner adds.