Bloomberg - Evening Briefing - Credit Suisse has a bad day

It’s not 2008 by any stretch, but you’d be forgiven for having a little of that sinking feeling from 15 years ago as news of trouble at yet another bank seems to arrive each day. Today, it was Credit Suisse. 

Ulrich Koerner, chief executive officer of Credit Suisse Group AG  Photographer: Hollie Adams/Bloomberg

Switzerland’s second-largest lender has been pummeled over the last several years by scandals, leadership changes and legal issues. Just yesterday, Chief Executive Officer Ulrich Koerner was pleading for patience as he pushes through a radical overhaul of the battered bank. But on Wednesday, its stock was hammered after its biggest shareholder ruled out increasing a stake because of regulatory constraints. Now banks that trade with Credit Suisse are moving to safeguard their finances, snapping up credit-default swaps that will compensate them if its fortunes darken further. So frantic was the demand for the contracts that they spiked to levels unseen at a major global bank since—you guessed it—the financial crisis. At least one bank, BNP Paribas, informed clients it will no longer accept requests to take over their derivatives contracts when Credit Suisse is the counterparty.

The developments reveal growing concern over possible contagion, and the extent to which banks are going to shield themselves from any fallout. Still, there’s little sign of widespread distress: For months now, the biggest US banks have have been whittling away their direct exposure to Credit Suisse, and the Treasury Department is said to be reviewing any exposure by the American financial sector. And Switzerland’s regulators stepped in late Wednesday, saying Credit Suisse will receive a liquidity backstop if needed. —David E. Rovella

The market upheaval that preceded (and perhaps paved the way for) today’s troubles in Europe began, of course, in sunny California. There, the smoking ruin of Silicon Valley Bank is triggering new rounds of blame. Broadly, the combination of swaggering executives and Trump-era deregulation has been placed at the bullseye of the how-did-this-happen dartboard. But now the venture capital community is pointing fingers, with some investors blaming their counterparts for igniting the panic that brought down their beloved business partner. In the chaotic early hours of the bank run on SVB, many VCs advised their companies to yank their deposits from the troubled lender. We all know what happened then.

Unsurprisingly, volatility gripped global markets today, though investors were speculating the turmoil will keep major central banks from pursuing big rate hikes. Stocks closed the day down but recovered some of the bigger losses of the day, thanks in large part to the Swiss government stepping in. A gauge of US financial heavyweights like JPMorgan and Citigroup also trimmed losses, but still hit the lowest since November 2020. Among smaller banks, First Republic led a continuing rout after being cut to junk by two credit firms.

In markets that have been verging on panic for days, investors are ditching anything that smells of risk, Paul Davies writes in Bloomberg Opinion. And Credit Suisse is at the top of the list of banks to bet against, thanks to a flood of outflows last year and its inability to stop making bad headlines. It’s in the middle of a complicated restructuring, too. But let’s be clear, Davies writes: Credit Suisse is a million miles away from SVB.

Russia denies that its pilots dumped fuel on or otherwise engaged in dangerous maneuvers that resulted in the crash of a US drone over the Black Sea. The US, for its part, says it has it on tape. And while both sides are reportedly discussing the incident, tensions have risen amid fears of a direct confrontation over Vladimir Putin’s grinding, bloody war on Ukraine, in which potentially tens of thousands of Ukrainians have been killed.

Mark Milley, chairman of the US joint chiefs of staff, on Wednesday discussed the crash of a US drone after it was allegedly hit by Russian fighter jets. Photographer: Chris Kleponis/CNP

TikTok’s leadership is discussing the possibility of separating from Chinese parent ByteDance to help address increasingly urgent questions about national security risks. A divestiture, which could result in a sale or initial public offering, is considered a last resort. TikTok’s US business could be valued at $40 billion to $50 billion, according to Bloomberg Intelligence.

It’s been a mere four months since artificial intelligence company OpenAI unleashed ChatGPT. In just 15 short weeks, it has sparked doomsday predictions in global job markets, disrupted education systems and drawn millions of users, from big banks to app developers. But now it’s goodbye to ChatGPT and hello ChatGPT-4—an even more powerful tool. Here’s what you need to know.

Suddenly things don’t look quite so bright for the billionaires of India’s new Gilded Age. Even before a short-seller broadside against Gautam Adani knocked $153 billion off the value of his companies, the recent phenomenal wealth growth of the nation’s super-elite was starting to sputter. Four years ago, when Bloomberg first compiled an Asia-specific ranking of the 20 richest families, three from India appeared worth a combined $87.6 billion. By 2022, there were five controlling $168.7 billion—tying in number Hong Kong’s storied dynasties. This year, everything is different, and the news for Asia’s richest isn’t quite so golden. Here are the 20 richest families in Asia right now.

Photographer: Deepak Gupta/Hindustan Times/Getty Images

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International cargo and container shipping is responsible for 3% of global greenhouse gas emissions—roughly one billion metric tons of carbon dioxide annually. That’s equal to the annual emissions of Japan. Despite this, the industry has made few inroads toward decarbonization, regularly attributing it to the difficulty in finding alternative ways to power big ships. But recently, the world’s massive ocean transport companies have been coming up with ways to burn a little less fuel. They’re employing everything from schedule changes to slowing down to special paint and even a new take on sails. But none of this is expected to change the fact that, by 2050, the industry’s emissions could be 30% higher. In many ways, the global shipping industry is looking to rethink everything about itself—except its biggest, dirtiest problem of all.

Norsepower, a manufacturer in Finland, claims its rotor sail can reduce ships emissions by as much as 20% over its lifetime. Photographer: Jens Büttner/Picture Alliance/Getty Images

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