Switzerland's financial market regulator FINMA defended its decision to impose steep losses on Credit Suisse bond holders on Thursday, saying the decision was legally watertight.
A pedestrian walks past a logo of Credit Suisse outside its office building in Hong Kong, China March 21, 2023. REUTERS/Lam Yik
ZURICH, March 23 - Switzerland's financial market regulator FINMA defended its decision to impose steep losses on Credit SuisseOn Sunday, Switzerland announced a multi-billion francAs part of that deal the Swiss regulator ordered 16 billion Swiss francs of its Additional Tier 1 debt to be written down to zero, while shareholders received some compensation.
"The AT1 instruments issued by Credit Suisse contractually provide that they will be completely written down in a 'viability event', in particular if extraordinary government support is granted," FINMA said. "As Credit Suisse received extraordinary liquidity assistance loans secured by a federal default guarantee on 19 March 2023, these contractual conditions were met for the AT1 instruments issued by the bank," it added.FINMA Director Urban Angehrn said that "a solution was found on Sunday to protect clients, the financial centre and the markets".
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