This week, Moody’s Investors Service announced that it expects Credit Suisse’s losses to be $3 billion, which could cause the capital base to fall below 13%. If the bank’s Tier 1 capital ratio remained below 13%, it would fall into the negative credit category. The bank was mired in controversy, with S&P Global and Moody’s having a negative outlook.

“The current market environment is not conducive to restructuring and does not support Credit Suisse’s current business model in capital markets,” said Alessandro Roccati, senior vice president of Moody’s Financial Institutions Group. “Deteriorating market conditions affected the potential realizable value of the businesses they were considering selling.”

“While the bank’s current liquidity position is not too weak, it looks like Credit Suisse will be offering another round of writedowns at the end of the month. What will its solvency look like then? This is a big question for Credit Suisse, but some indicators show that problems exist across the industry,” said Richard Gardner, CEO of Modulus, a US developer of high-performance trading and monitoring technologies that powers global equities, derivatives, and digital asset exchanges.

“There is a lot of talk about the bank split, but there are challenges even there. Its US operations focused on leveraged finance, which was a cash cow as the Fed offered historically low interest rates. Now that rates are rising significantly, the company won’t be able to post the same earnings even under the best of circumstances,” Gardner said.

“I wouldn’t be surprised to see a bank liquidation coming in the very short term, maybe even as early as next week. Credit Suisse is not alone in this difficult situation. The Bank of England has confirmed that UK pensions have almost collapsed. Since the bond market takes the money printing from central banks, we are about to see a major upheaval,” Gardner said.

Modulus is known in the fintech segment as a leader in the development of ultra-high frequency trading systems and blockchain technologies. Modulus has provided its exchange solution to some of the most profitable digital asset exchanges in the industry, including a well-known multi-billion dollar cryptocurrency exchange. Over the past twenty years, the company has developed technology for the world’s most notable institutions, with a client list that includes NASA, NASDAQ, Goldman Sachs, Merrill Lynch, JP Morgan Chase, Bank of America, Barclays, Siemens, Shell, Yahoo! , Microsoft, Cornell University and the University of Chicago.

“Credit Suisse is in a particularly difficult situation, given the problems it experienced even before the start of the interest rate hike. Last year, they suffered losses of $5.5 billion from the default of Archegos Capital Management, as well as supply chain finance funds linked to Greensill,” noted Gardner.


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