Credit Suisse (NYSE:CS) Chairman Axel Lehmann is blaming the banks collapse on retail investors.
In an interview in Switzerland, the Chairman says “last autumn we had a social media storm” and highlights the changing environment in the market.
“Last autumn we had a social media storm and this had huge repercussions, more in the retail sector than in the wholesale sector, and too much becomes too much. And that’s when we reached this point, it’s an accumulation of various facts that contributed to one another then materialized at some point. And this then caused the situation.”
UBS has agreed to buy Credit Suisse, its beleaguered rival, the Swiss government said on Sunday, in a hastily arranged deal meant to shore up the global financial sector after a week of turmoil.
Swiss government leaders and regulators said that the deal was the most effective way of reassuring investors after Credit Suisse’s shares tumbled following the implosion of Silicon Valley Bank earlier this month.
One of the sources cautioned that the talks to resolve the crisis of confidence in Credit Suisse are encountering significant obstacles, and 10,000 jobs may have to be cut if the two banks combine.
In November, the bank had warned investors in a 6-K filing of potential losses due to naked short covering — a topic retail investors have been urging the SEC to look into.
The 167-year-old Credit Suisse is the biggest name involved in the turmoil unleashed by the collapse of US lenders Silicon Valley Bank and Signature Bank over the past week.
During the collapse of SVB, we also saw Wall Street banks lose more than $55 billion in just one day alone.
Retail Investors Mock Credit Suisse
Credit Suisse shares have fallen below AMC’s price target of $0.95 — the share price the bank’s stock is currently trading at.
Retail investors are mocking Credit Suisse for its attempt to short and distort AMC Entertainment just months before its troubles.
Now Credit Suisse Chairman Axel Lehmann is blaming retail investors for the bank’s failures.
“We were affected by a model that no longer works in this market environment, and many clients have been very loyal for a very long time.
Last Autum we had a social media storm, and this had huge repercussions.”
But credit Suisse clients have been withdrawing billions of dollars in the past months.
“The unusual intervention by the U.S regulator is the latest blow to Credit Suisse as it attempts to rebuild investor confidence after a series of scandals and setbacks that have sent its shares plunging and led clients to withdraw billions” says Reuters.
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