How bad is the banking crisis?
to ensure there is enough funding for global financial institutions amid the current stressed market conditions.broke down this measure in a tweet"Use of Fed international swap lines spikes during severe risk off episodes when there is shortage of global dollar liquidity: GFC, EZ crisis, temper tantrum, Covid 3/20 shock. Expect another likely spike now. That is why the CBs coordinated action today," Roubini tweeted Sunday night.
Green adds that the"emergency lifelines" that the regulators and governments have provided to the banks have curbed any risk of contagion within the sector and the chances of turmoil spreading across other firms and sectors has been contained. "A harsh spotlight has been focused on banks in the last week and while it has been for many of the wrong reasons, it has also served to highlight to investors that the rules imposed in the wake of the 2008 financial crisis mean that most banks are in a strong position to withstand shocks," deVere's Green said.
On Sunday, Credit Suisse said that as part of the rescue deal, the Swiss regulator requires almost $17 billion of the lender's so-called Additional Tier 1 debt to be written down to zero. AT1 or Contingent Convertible bonds are basically debt securities that convert into equity when the capital buffers of a bank fall below a certain level. After the 2008 financial crisis, the Bank of International Settlements made it necessary for all European banks to issue CoCo bonds.
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