After Credit Suisse fiasco, Gulf states need to relook investment plays

After Credit Suisse fiasco, Gulf states need to relook investment plays

The Western banking system went through a week-long rapid crisis that resulted in the collapse of three American banks with combined assets of $333 billion, including Silicon Valley Bank, which was then acquired by First Citizens. There was also a Swiss bank that fell by the wayside due to a liquidity shortage. Some of the global banks are yet to emerge from the legacy of the 2008 Global Financial Crisis, with Credit Suisse being one even after receiving new equity support from Gulf entities – notably Saudi National Bank - as recent as last November. Before UBS stepped in to acquire Credit Suisse, the Saudi National Bank chairman, who was later relieved of his post, claimed the bank’s investment was sound and profitable. Unfortunately, Gulf institutions suffered significant losses from the Credit Suisse exposure, running into billions of dollars. In the US, the Federal Reserve allocated $300 billion to assist struggling banks, while the Swiss National Bank granted $54 billion to Credit Suisse. However, the latter’s efforts did not prevent the collapse of Credit Suisse and which then led to the acquisition by UBS, resulting in the write-off of $17 billion in bonds issued by Credit Suisse. This move met