UBS Buying Credit Suisse | But What Really Went Wrong With The 167 Year Old Bank?
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- čas přidán 1. 08. 2024
- Hey there, have you heard the big news coming out of Switzerland? It's a major shakeup in the banking industry as UBS, one of the biggest banks in the country, has agreed to acquire Credit Suisse, one of its rival banks, for a whopping $3.23 billion. But wait, there's more! UBS will also be taking on up to $5.4 billion in losses as part of the deal, which was arranged by Swiss authorities in a move to prevent a crisis.
So, what's the story with Credit Suisse? Well, it seems the bank has been facing some challenges recently, with its debts piling up. As part of the merger, $17 billion of Credit Suisse's debt will be written off to help ease the burden on UBS.
But here's the question: was this really a crisis, or just a bump in the road? That's what we'll be exploring in this video. We'll take a look back at what went wrong with Credit Suisse and you tell us in the comment section whether or not this merger will cast a shadow over Switzerland's banking industry? So without any further ado, let’s dive in!
00:00 Introduction
00:51 What is the Lehman Brother Crisis?
09:36 What is happening with Credit Suisse
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#creditsuisse #creditsuissecrisis #creditsuissecollapse #financialcrisis #bankingcrisis #learnapp
Thank you. I work in investment banking at CS, well, now First Boston. To be carved up then structured for an eventual spin out. Spinning the investment bank out is part of the solution to get CS back on track as a world renowned private bank. Let's see.
Hey Hernan , thanks so much for commenting. Since you are bang in on the industry, can you tell us something else the average person wouldn’t know? Thanks for watching means the world to us :)
@@PrateekSinghLearnApp Sure. Agree with your analysis. The bank has plenty of capital and liquidity. CS is raising $4b in additional capital of which $1.5b is coming from Saudi Arabia.
Essentially CS did not have a strong enough risk culture up until recently. The billions lost on Archegos and Greensill are an example. So keep in mind that it was only a handful of transactions that caused a tremendous problem. Moreover it was the lack of adequate risk controls to sufficiently identify those potential losses. All of which has now changed. All this took place in the Investment Banking division. So CS decided to go back to its roots as a high net worth private bank and ultimately spin off the Investment Bank. There still is a tremendous amount of value in the Investment Bank it just needs go be simplified and focused on less risky transactions (will focus more on M&A advisory rather than selling product). For example, part of the "de-risking" was selling the Structured Products group to a JV between Apollo and Pimco. The Structured Products group is sophisticated, profitable, staffed by very high-quality colleagues but it required too much capital to be held to operate it efficiently within CS. A few other non-core smaller divisions may be sunsetted. The remaining Investment Bank will be led by Michael Klein who is an amazing, smart former banker from Citi. Over the next 2 years we will focus on advising our clients, maintain excellent ECM and DCM capabilities plus raise outside capital to invest in creating infrastructure to ultimately successfully spin off from CS. Will be an exciting journey to build the First Boston brand. We will continue close ties with Credit Suisse which a storied brand and powerhouse.
I'm all for free markets and trading. But oftentimes rumors and speculation by day traders override solid research in understanding what a company is all about. I'm not suggesting CS stock will increase or decrease but simply do your research.
All this is public information, BTW, but sometimes easier to recap it in a paragraph...
@@hernanhernandez3861 the thing in CS is that no employee cares about the compliments.
Love the detailed research🏆
Thank you Yash your comment means the world!
Great video and very well explained!
Hey thanks Sam :)
amazing Pratik. Especially the capital structure illustration really makes the climax like Kantara :) thanks for the vide0!
Thanks so much basab!
Wow. Absolute masterclass. Thanks to you and your team Pratik.
Thank you Siddarth!
Great vdo. Beautifully done, simple and easy to understand. Pls make more such vdos, esp financial topics and issues.👍👍👍
So happy to hear this, thank you Anoop
Thank you for explaining..!!
Thank you!
Awesome teaching/representation skills, with Great content .. makes a lethal combo
Thank you raj! Means a lot ❤️
thank you for the contents. its really amazing
Thanks for the comment Hendy :)
Very Well explained! Thanks
Thank you!
Pratik sir, brilliant explanation!!! Thank you so much 🙏
Thank you Yogi!
Great explainer!
Hey thanks Viju!
Very nice explanation and great video...
Hey thanks Noopur bhai seeing you here after a while. Keep posting comments I love seeing them :)
Thank You very much for all the amazing videos. Kudos to you and your entire team, Prateek :)
Hey Hari thanks so much!!!
Extremely good! Cheers from the usa
Hey thanks Jake glad you found this useful :)
So good....thanks from Switzerland.
Amazing thanks Rolfyh, I’ve visited your country Zurich, interlaken and more….so beautiful :).
Explained very well
Thank you ❤️
Great video! Can you do another on the restructuring? Thank you!
Sure Salena will work on that
Fantastic video
Thank you Karthi!!
Thank you for taking the time to help us understand this current event as the markets remain restless. The way that you described this information was really clear and concise and made for a much easier learning curve than through individual study alone.
Hey Connor thanks a lot your comment means a lot to us :)
Simply, WOW!
Complicated issue explained in a simple way
👍
Damn. That drawing overlay animation is dope 🔥
Hey thanks dude!!
Awesome👍
Hey thank you!
Awesome 😎
Thanks om!
The LCR ratio of Credit Suisse is 110%. It means even if all investors take their money out, the bank will have more money. This is way different than the scenario in 2007.
It’s not going bust but yeah jobs cuts, salaries hike reduction, less promotions and less movement to high cost centre from low cost centre will be be seen to employees.
Nice observation, Rocky. Interesting...
and... we arrive in march of 2023.
I wonder how up to date Credit Suisse's liquidity assessmant is as of today March 14th, 2023?
The problem is that CS is more of a criminal organization than a legitimate, honest business. You cannot simply use their balance sheet to know the true nature of their liquidity. I'm not sure when, but they will be either bailed out of crash and burn.
Interesting I see
Good analysis, but don't believe it, then why is Credit Suisse collapsing? Can rumors be so strong as to collapse the facts? Thank you for the explanation. It was quite good and a little humorous.
Definitely not a rumour! UBS came to the rescue to save Credit Suisse from collapsing.
they will restructure the staffing
massive down sizing I believe to get lean In the market. once Q4 comes maybe the liquidation will be resolved.
downsizing can save a lot of cost if the number of relived is High.
maybe by Q1 things may look good.
but UK still needs more time
Interesting take thanks Jason
Credit Suisse not being a US bank may just be "too big to BAIL"
Wonderful.👍 explained very सरलतासे. I just love learnapp. ❤️
Thank you Akshay :)
but market cap is 10+B now, so that is worrying from my point of view. AUM may be high, but CS is worth 10B, and if they lose 10B what are they worth?
Good point but valuation has less to do with what’s in the bank and more like what it’s future worth is likely to be. Thanks for bringing it up
So if the HNI's bought the bonds, wouldn't they have insured (bought CDS) it at the start or did they decide to take the decision of buying CDS at a later date. Why does CDS are volatile I thought purchasing Insurance (CDS in this one) is mandatory when they are buying this type of risky purchases.
Bonds and the CDS is bought together usually. But the price of the CDS etc keeps changing since people are trading it
@@PrateekSinghLearnApp Thanks. Allowing CDS to be traded in the market is essentially a gambling only here the stakes are high and only HNI's and institutions are allowed to participate. Jeez the more I learn about economy the murkier it gets
Good Video.. stripper wala part movie se churaya
Haha right right
What about today?
It is again in the news today. Is it going bankrupt?
No, as per the news its not going bankrupt.
Only 1 person went to jail while the rest did not
Oh I see
yeah well. these 4 months didn't age well
Thinking FEW MONTHS BACK YOU MADE A VIDEO SAYING Credit suisse will NOT FAIL , NOW you deleted it why ???
No not deleted this is the same video title changed. We don’t delete videos, please watch this one again :)
Aam Aadmi Mango People 😂
Hahaha lol Mazzza aya
@@PrateekSinghLearnApp Yup you explained very well 👍🏻 One suggestion would be to change the music or no music is also good than this 🙂
I do t trust you all the scammers over the phone should like you Credit Suisse going down
What? Please rephrase your comment didn’t make much sense
Your content is quite limited...
Oh sorry about that Praveen
Very bad bacground music.
Sorry /:
Free ka Knowledge milraha hai uspe focus karo bhai. 🤦🏽
I was so focused on the video I didn’t even notice the music.
@@PrateekSinghLearnApp don’t apologise yaar. Be unapologetic sometimes. You cant keep everybody happy. This was a high quality content!
@@Kanonymous-gj9pr so anyone can rob from you while you're watching vidoes :). lol...