[abc03]

Currently in my view the only solution. The solution with UBS is not supported by the people. The Swiss National Bank (SNB) has basically unlimited money power. Credit Suisse is not technically insolvent like Silicon Valley Bank but lacks trust in the market. The risk is too high that the contagion spreads to UBS and only defers the problem to a later date (what will we do with UBS). SNB should have already reacted much earlier and they are partly responsible for the problem (along with management and the biggest shareholder and their CHF 50B line but which they asked to be secured). It's high time to send a powerful message before Monday. And for the SNB it's easy to buy all bonds in the market at a distressed level and make a hefty return. This is better than to invest their currency reserves in the stock market. Edit: Added last two sentences.

[weard_beard]

The derivatives and trading arm is what’s of concern here. Bonds and rates are a paper covering for trillions in swaps: bad bets that need to be repaid. These swaps may involve the solvency of US institutions.

That’s why this isn’t so straight forward.

[curiousgal]

> buy all bonds in the market at a distressed level and make a hefty return.

How? They can't sell the bonds. And holding the bonds to maturity is questionable since CS may likely default. If it doesn't default, it would be thanks to a lifeline thrown by...SNB. So yeah, no idea what you're on about there.

[abc03]

Why sell it? The SNB doesn't need to sell them and yes they can hold them to maturity. They can also give a larger credit line to CS and CS can buy back all the bonds from investor that want it. At CHF 100B it's a CHF 50B - 20B capital injection.

[sschueller]

I 100% agree and I hope it goes into this direction. The state also has more power to push back on fines that are incoming from other states regarding tax evasion etc. which UBS would have to deal with putting it into a bad situation.