Restore trust. This was the objective of the rescue of Credit Suisse orchestrated by the Swiss authorities with UBS. It is still too early to know if it has been achieved. The only certainty at this stage: the surprising treatment reserved for the holders of 16 billion francs of subordinated debt from Credit Suisse has sown chaos on this market of 275 billion dollars.
On Sunday evening, the Swiss regulatory authorities decided that the value of Credit Suisse’s Additional Tier 1 (AT1) securities, a contingent convertible bond or CoCo (Contingent Convertible) – riskier than traditional debt – would increase from 16 billion francs to zero. A scandal, to hear wrung-out investors.
