This is CBS I in the world with Joseph Sternberg, my colleague. He's a member of the editor

board of the Wall Street Journal. He's based in London. He writes politically economics.

And the headlines from the London-based financial times, the pink newspaper.

Chaotic, but alarming about Credit Suisse. Asia investors gobsmacked, that's an English word.

By 17 billion Credit Suisse bond wipe out. The big read, How the Swiss Trinity forced UBS

to save Credit Suisse. The fresh headlines, Switzerland orders the suspension of deferred

bonuses at Credit Suisse. And more alarming news about Credit Suisse. Thousands of jobs

to be lost. Everybody in fear in Switzerland.

Joe, is this bank credit, bank finance, bank deposit panic similar to what we're experiencing

in the US about regional banks? Or is this completely different galaxy?

Well, again, I think that the fundamental phenomenon is the same, which is of depositors losing faith

in bank management and bank management's capacity to manage depositors risk. And this had been a long

term problem at Credit Suisse. It's certainly throughout 2022, they were experiencing huge deposit

outflows. And the matter came to the head. Partly, that was a market signal that meant that once SVB

in the US had collapsed, you know, into government oversight a couple weekends ago, people very quickly

understood that the deposit outflow was a market signal that Credit Suisse was the weak link in Europe.

So I think that is part of the phenomenon that has happened there. But the regulatory solution to

this has just become a total chaotic mess. So the Swiss authorities, it's worth pointing out here

how Credit Suisse was regulated because what is unusual is that it was one of the, I think one of

the 25 largest banks in the world. It was a very large financial institution. So definitely in that

top tier that was subjected to the tightest financial regulation after the 2008 panic.

Right. Systemic risk. Yes. To manage its systemic risk, it had high capital adequacy ratios.

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