Investment Banking

Credit Suisse’s overblown default panic poses real risks to overhaul

The bank may be in a feedback loop, which could dent confidence and drive funding costs higher, analysts say

JPMorgan says market sell-off could force Credit Suisse to bring forward the date of its restructure
JPMorgan says market sell-off could force Credit Suisse to bring forward the date of its restructure Photo: Jose Cendon/Getty Images

Credit Suisse executives' calls for calm in the face of a slumping share price and widening credit default swaps have backfired, with the embattled Swiss lender's problems worsening after a weekend of rumours over its financial health.

The Swiss lender is battling a fresh crisis of confidence after its spreads on CDS, a form of insurance against a potential default, hit a new high on 3 October, while its share price fell as much as 12% and has tumbled by 60% this year.

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