Rut-Roh ... UK financial system, also Credit Suisse

Investing
1

There are a couple potential Lehman Moments coming up here, with worldwide implications.

Bank of England intervenes in bond markets again, warns of ‘material risk’ to UK financial stability

CNBC: PUBLISHED TUE, OCT 11 2022

  • The Bank of England said dysfunction in the index-linked gilt market and “the prospect of self-reinforcing ‘fire sale’ dynamics pose a material risk to U.K. financial stability.”

  • The move marks the second expansion of the Bank’s extraordinary rescue package in as many days, after it increased the limit for its daily gilt purchases on Monday ahead of the planned end of the purchase scheme on Friday.

Credit Suisse to buy back $3 billion in debt, sell landmark hotel as credit fears persist

PUBLISHED FRI, OCT 7 2022 1:11 AM EDT

Troubled bank Credit Suisse offered to buy back up to 3 billion Swiss francs ($3.03 billion) of debt securities Friday, as it navigates a plunging share price and a rise in bets against its debt.

It comes after Credit Suisse’s shares briefly hit an all-time low earlier this week, and credit default swaps reached a record high, amid the market’s skittishness over its future.

Shares closed at 4.22 Swiss francs on Thursday. They are down over 50% year to date.

2

Do you think the UK’s woes might be the result of a Brexit hangover?

3

I don’t know, they’ve always had their own currency, they were never on the Euro. It’s due to their pension system having leveraged bond positions. The 5 year US Treasury is down 15% imagine if you were levered 2x ouch, your fund would be insolvent. It’s the rise in interest rates it’s breaking things