Frankfurt (awp/afp) – Banks in the eurozone have “very limited” exposure to Credit Suisse, particularly when it comes to billions in bonds evaporated after the takeover by rival bank UBS, the bank’s president said on Monday. European Central Bank (ECB), Christine Lagarde.
The exposure of the establishments in the euro zone supervised by the ECB is “very limited to Credit Suisse, in particular with regard to the (debt securities) AT1”, “we are talking about millions”, explained Ms Lagarde, while 16 billions of Swiss francs worth of these securities were canceled outright by the UBS/Credit Suisse merger.
In Germany, Deutsche Bank has “close to zero” exposure to these bonds and it is “zero” at Commerzbank, spokespersons for these establishments told AFP.
Outside the banking sector, the French insurer Axa said on Monday that it was not exposed to shares or bonds at risk called AT1 of Credit Suisse.
AT1 debt securities, also known as “CoCos”, were created in the wake of the 2008 financial crisis and enter into the calculation of a bank’s capital at large.
The Swiss authorities have decided to place part of the financial burden of the merger between Credit Suisse and UBS on the backs of the holders of such bonds, thus favoring the shareholders of the former.
The treatment is different in the euro zone, where equity holders “would be the first to absorb the losses and it is only after their full use that the Additional Tier 1 would be concerned”, had indicated the ECB in the morning.
afp/rp