Credit Suisse Has the Market on Edge. What Should You Do?
The big news out of the financial sector over the weekend concerned investment bank Credit Suisse (NYSE: CS) and its financial health. Shares of the bank dipped to a new all-time low Monday morning before rebounding slightly, but many investors and analysts are deeply concerned about the Switzerland-based bank's future.
Here's a rundown of what happened, why investors are so concerned, and whether Credit Suisse is a bargain stock to consider for your portfolio.
The short answer is that we don't know for sure. The Financial Times reported that Credit Suisse was in discussions with investors to reassure them of the bank's financial health. It was also reported that CEO Ulrich Korner sent a memo indicating that the bank is looking to raise capital. And without getting too deep into a discussion of derivatives, the bank's credit default swaps -- basically insurance against the bank defaulting on its debt -- saw costs rise sharply, essentially indicating that investor confidence in the bank's financial health was eroding.
Source Fool.com
