A sharp increase in sight deposits at the Swiss National Bank (SNB) indicates that Credit Suisse and UBS have made heavy use of the liquidity assistance provided by the central bank.
The sight deposits of banks and the Confederation at the central bank shot up to 24 billion Swiss francs in the week ending 567 March, as the SNB announced on Monday. The increase of 52 billion within a week is the second largest increase to date.
Commercial banks seize the opportunity
"The increase is likely due to Credit Suisse drawing on the additional liquidity offered by the SNB," said Karsten Junius, economist at J. Safra Sarasin. And UBS could also use the facility. "How much exactly, is difficult to say, but all banks could currently increase their liquidity as well." The SNB declined to comment, as did the two banks.
The collapse of California's Silicon Valley Bank (SVB) more than two weeks ago and the emergency sale of Credit Suisse fueled fears of further collapses in the banking industry, so investors are very nervous.
UBS is taking over the ailing rival in a deal orchestrated by the Swiss government for three billion Swiss francs. The SNB and the Confederation are providing up to around CHF 260 billion in liquidity assistance and guarantees in the rescue operation.
Finance Minister Karin Keller-Sutter told Swiss radio station SRF on Saturday that Credit Suisse had already drawn billions of euros from the funds granted to secure its liquidity.