Troubled Credit Suisse Bank's financial woes deepen

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Troubled Credit Suisse Bank's financial woes deepen

Despite an industry-led emergency infusion, media reports said that the US First Republic Bank's financial woes appeared to be deepening.

According to the New York Times, people familiar with the situation said that the bank is trying to raise money through a private issue of new shares.

The news comes just 24 hours after First Republic secured a $30 billion investment from a consortium of banks, according to CNN.

One person who spoke to the New York Times said that a full sale of the bank remains on the table.

Stocks fell Friday, ending the day as tumult continued to unnerve Wall Street, according to CNN.

The Dow was down 1.2 per cent at the end of the week. The S&P 500 was up 1.4 per cent at the end of the week. The Nasdaq Composite rose by 4.4 per cent.

The shares of the First Republic plunged and were down about 33 per cent, even after a group of large interveners offered the troubled bank $30 billion in deposits, according to CNN.

Credit Suisse's stock slipped about 8 per cent as Wall Street was concerned about the bank's ability to recover from this week's turmoil.

After a difficult week, investors are hoping that next week's Federal Reserve meeting will shed more light on the trajectory of the economy. According to the CME FedWatch Tool, traders see a roughly 63 per cent probability of a quarter-point hike.

Swiss bank giant UBS is about to take over all or part of Credit Suisse after a day in which the troubled banking giant saw its share price fall despite a $54 billion injection, according to The Guardian.

The boards of the two are set to meet separately over the weekend in talks initiated by the Swiss National Bank, which provided Credit Suisse a lifeline, and Swiss Finma, according to the Financial Times.

The senior Credit Suisse executive said wealth management clients were leaving the bank. A merger between UBS and Credit Suisse, valued at $7 billion, was plan A to arrest a collapse in confidence, the FT said.

The potential risks to its own business in taking on Swiss counterpart was reported by UBS, according to The Guardian.

Credit Suisse is a strong global bank. We are a lot more than we do, and we meet all regulatory requirements. Chief executive Ulrich Koerner said earlier this week that our capital, our liquidity basis, is very strong.

Credit Suisse is the largest bank to have been caught up in a growing banking crisis. Silicon Valley Bank parent company filed for bankruptcy on Friday after worried depositors pulled billions from their accounts. On Thursday, Wall Street launched a rescue package for San Francisco-based First Republic, which had been hit by a similar wave of withdrawals.

The deal calmed nervous US investors but bank stocks fell again on Friday as fear grew that the crisis is escalating, The Guardian reported.