How big is the capital hole at Credit Suisse?(ft.com)
ft.com
How big is the capital hole at Credit Suisse?
https://www.ft.com/content/8e6e7255-ca94-4a82-8ca8-20fc25ef3785
3 comments
http://archive.today/Xh9JK
Pretty huge for a tier 1 banks market cap to fall 55%.
But that isn’t quite the question asked by the headline, right? From the article, which tries to address the headline question:
> ...common equity tier one ratio, which reflects its financial resilience, of 13.5 per cent...
Market cap is one map. Supposedly, reported common equity tier one ratio is a map more resembling the territory of the headline question. Except the supposed territory is based upon a high latency read and the market cap is supposed to be a low latency read.
I’ve yet to find a list of the top 80% by valuation coco’s referred to in the article, nor do I see a reckoning of the recent market turmoil in bonds and equities affecting that ratio; it might not be good. Broad market indices are down roughly say 15% since the quarter the ratio was reported, maybe? Surely that wouldn’t linearly shave off that ratio down to 11.3%?
I’m more interested in how the parties underwriting the CDS contracts are pricing them.
> ...common equity tier one ratio, which reflects its financial resilience, of 13.5 per cent...
Market cap is one map. Supposedly, reported common equity tier one ratio is a map more resembling the territory of the headline question. Except the supposed territory is based upon a high latency read and the market cap is supposed to be a low latency read.
I’ve yet to find a list of the top 80% by valuation coco’s referred to in the article, nor do I see a reckoning of the recent market turmoil in bonds and equities affecting that ratio; it might not be good. Broad market indices are down roughly say 15% since the quarter the ratio was reported, maybe? Surely that wouldn’t linearly shave off that ratio down to 11.3%?
I’m more interested in how the parties underwriting the CDS contracts are pricing them.
How do analysts reach a number of 4bn or 6bn required to fill a capital hole when CS announces it's dialing back 1.5 bn of costs?