Goldman Sachs cuts outlook for European
bank debt over Credit Suisse crisis
Send a link to a friend
[March 18, 2023]
LONDON (Reuters) - Goldman Sachs has cut its recommendation on
exposure to European bank debt to neutral from overweight, saying a lack
of clarity on Credit Suisse's future path would put pressure on the
broader sector in the region. |
A Goldman Sachs sign is seen above their
booth on the floor of the New York Stock Exchange, January 19, 2011.
REUTERS/Brendan McDermid/File Photo |
Credit Suisse was thrown a $54 billion lifeline by the Swiss
central bank on Thursday to shore up liquidity after a slump in
its shares and bonds intensified fears about a global banking
crisis.
"The Swiss National Bank's decision to provide Credit Suisse
with significant and inexpensive liquidity fell short of
stabilising sentiment in both the equity and credit markets,"
Goldman Sachs analyst Lotfi Karoui wrote in a note to clients
dated March 17.
Relative to 15 years ago, the sector's fundamentals were
stronger and the global systemic linkages weaker - a trend that
greatly limited the risk of a potential vicious circle of
counterparty credit losses, Karoui noted.
"However, a more forceful policy response is likely needed to
bring some stability."
Goldman Sachs initiated its overweight recommendation on
European bank debt in mid-January.
Credit Suisse Group AG entered a make-or-break weekend after
some rivals grew cautious in their dealings with the bank and
regulators urged it to pursue a deal with Swiss rival UBS AG.
(Reporting by Karin Strohecker, editing by Kirsten Donovan)
[© 2023 Thomson Reuters. All rights
reserved.]
This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content.
|
|
|