Swiss Regulator Warns of Full-Scale Bank Run if Credit Suisse Goes Bankrupt

Allowing the bankruptcy of troubled lender Credit Suisse
would have crippled Switzerland’s economy and financial center and likely resulted in deposit runs at other banks, Swiss regulator FINMA said Wednesday.

FINMA (the Swiss Financial Market Supervisory Authority) and the Swiss central bank brokered UBS’ takeover for embattled Zurich rival Credit Suisse for 3 billion Swiss francs ($3.3 billion), in a deal announced on March 19. As part of the transaction, the regulator instructed Credit Suisse to write down 16 billion Swiss francs worth of AT1 bonds — widely regarded as higher risk investments — to zero, while entitling equity shareholders to payouts at the stock’s takeover value.

Source : Swiss Regulator Warns of Full-Scale Bank Run if Credit Suisse Goes Bankrupt