Very risky. Management has been rather poor in the past. However, the high debt ratio is normal for banks. This is in the nature of things, as they generally finance themselves via the central banks (in the case of CS, this tends to be the SNB). Banks pass on the interest rate set by central banks directly to customers, with a markup, in order to profit themselves. This is the basic business of every credit bank. With regard to debt capital structure, there are guidelines called "Basel III", which prescribe how much equity capital banks must have as a minimum. In the course of the financial crisis, this ratio was increased again. So the criticism regarding the capital structure does not come out of the blue.
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33
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2Yr
@TheAccountant89 Management has been replaced. All "legacy issues" at the moment. Essentially, it's about the CDS spread. But I think looking at a single key figure is a bit thin, especially for a bank.
I agree with you that it is very risky. But the risk of bankruptcy is still quite manageable. I see the opportunities there just as much as the risks
I agree with you that it is very risky. But the risk of bankruptcy is still quite manageable. I see the opportunities there just as much as the risks
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Sparkojote has made a video about it. CS is so systemically important that the state would probably intervene to save it. But that would probably also mean that we Swiss taxpayers would have to foot the bill. The other alternative would be that it would go bankrupt, but then there would be a domino effect and other banks would be dragged down with it. That would probably be the start of a financial crisis like the one in 2008😒 https://youtu.be/AgT_LKWH-ck
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@Kkfknrr Yes, of course. In an emergency, it will be rescued somehow. But it's definitely not an investment for me.
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11
•@TheAccountant89 not for me either. I'm not familiar with the industry either. As the saying goes: "Don't invest in companies whose business models you don't know"😁
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11
•2Yr
@TheAccountant89 not really for me either. But for some reason, my fingers are still itching at the moment😅😂
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2Yr
@TheAccountant89 and IF they need to be rescued, the SNB will almost certainly be there to help Dieter. Why do they have difficulties getting rid of all their money🤣
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