Swiss National Bank

Banking crisis: What does it mean for crypto?

Cointelegraph breaks down the main events that led to the collapse of Silvergate, SVB and Signature Bank and explains what this all could mean for crypto.

Last week’s rapid collapse of Silvergate, Silicon Valley Bank (SVB) and Signature Bank has highlighted the fragility of the traditional banking sector while depriving crypto of its primary fiat on-ramps in the United States.

Most observers agree that the collapse of SVB, like the one of Silvergate, was largely the result of unfavorable market conditions and poor risk management. 

The shutdown of Signature was more controversial. According to multiple sources, the bank was not facing insolvency and had largely stabilized its capital outflow when U.S. regulators decided to take it over. Many in the crypto industry saw it as a political decision aimed at pushing crypto out of the United States.

Silvergate and Signature were the two leading financial institutions providing banking services to crypto companies in the United States. Following their shutdowns, it will be far more challenging for crypto companies to interact with the dollar-based financial system.

In the meantime, the collapse of SVB seems to have caused a ripple effect across the global banking sector. Credit Suisse, the second-largest Swiss financial institution, is going through a significant crisis that required the Swiss Central Bank to intervene with a $54 billion lifeline. 

If you want to know more about the ongoing banking crisis and how it affects cryptocurrencies, check out Cointelegraph’s latest video report on YouTube, and don’t forget to subscribe! 

Swiss National Bank says it will support Credit Suisse if necessary

Swiss regulators reaffirm the soundness of the Swiss financial system, following recent concerns about Credit Suisse.

The Swiss National Bank (SNB) and the Swiss Financial Market Supervisory Authority released a joint statement on March 15 on the stability of the Swiss banking system and Credit Suisse. The problems of “certain banks in the USA” do not pose a risk for the Swiss financial system, they wrote.

The statement was reportedly produced at the request of Credit Suisse. The regulators said Credit Suisse meets all capital and liquidity requirements, but “if necessary, the SNB will provide CS [Credit Suisse] with liquidity.” However, Credit Suisse still “meets the capital and liquidity requirements imposed on systemically important banks.” The statement acknowledges that Credit Suisse has been “affected by market reactions in recent days.”

On March 14, Credit Suisse Group CEO Ulrich Körner confirmed that the bank is conservatively positioned against interest rate risks. That day, the bank admitted “material weakness in our internal control over financial reporting” after its 2022 performance was the worst since the 2008 global financial crisis.

The SBN statement comes as Credit Suisse shares fell precipitously at the start of trading on March 15, losing up to 30%, and had been temporarily halted during a heavy sell-off. Trading was halted for several other European banks at the same time. 

Saudi National Bank Chair Ammar Al Khudairy said on March 15 that the Saudi central bank — the largest Credit Suisse shareholder, with 9.8% of its stock — would “absolutely not” provide support for Credit Suisse. 

European Central Bank officials have contacted banks they supervise to ask about their Credit Suisse exposure, and the French finance minister will call his Swiss colleague to discuss the developments at Credit Suisse. A U.S. Treasury official told the news service that it was monitoring the bank’s situation.