Background
Credit Suisse, a global systemically important bank, entered March 2023 weakened by years of losses, scandals and deposit outflows. The collapse of Silicon Valley Bank in the United States turned chronic weakness into an acute run: within days the bank was dependent on emergency liquidity from the Swiss National Bank, and its viability was in open question.
A rescue outside resolution
Although Credit Suisse was, as a G-SIB, the archetypal subject of post-2008 resolution planning, the Swiss authorities chose not to trigger the resolution regime. Over the weekend of 18–19 March 2023, using emergency ordinance powers, they arranged its acquisition by UBS: shareholders received UBS shares worth around CHF 3bn, extensive public liquidity backstops were provided, and FINMA ordered Credit Suisse's Additional Tier 1 instruments — roughly CHF 16bn — to be written down to zero.
The AT1 controversy
The combination — AT1 wiped out while equity holders received consideration — inverted the loss-absorption sequence investors expected and repriced the entire AT1 market within hours. The write-down relied on contractual viability-event language in the Swiss instruments and on the emergency ordinance, rather than on a resolution action. On 20 March 2023 the SRB, EBA and ECB issued a joint statement stressing that in the EU framework, common equity absorbs losses fully before any write-down of AT1 — a deliberate signal that the Swiss sequencing would not be replicated in the banking union. The write-down has been the subject of extensive litigation before the Swiss courts, which the editor should verify for current status before relying on this page.
Why the case matters
Credit Suisse is the most consequential bank failure in Europe since the framework was built, and it happened outside the framework. It sharpened three debates that remain open: whether resolution plans for G-SIBs would actually be used under acute stress; how contractual AT1 terms interact with statutory creditor hierarchies; and how much liquidity a resolution of a global bank truly requires.