ZURICH/FRANKFURT, March 15 (Reuters) - Switzerland's central bank pledged on Wednesday to fund Credit Suisse with liquidity "if necessary," a first for a global bank since the financial crisis more than a decade ago.
In a joint statement with supervisor FINMA, they announced the radical step, but insisted that Credit Suisse was sound and "meets the capital and liquidity requirements imposed on systemically important banks".
The move to support the bank, with the pledge of central bank money, is designed to stem a crisis of confidence in Switzerland's second-biggest lender.
It puts the central bank on the hook, however, should confidence in the bank continue to tumble.
The bank's stock had plunged more than 30% on Wednesday, following months of turmoil. Governments and at least one bank put pressure on Switzerland to act, according to people familiar with the matter.
The SNB and FINMA sought to underpin confidence in the bank, saying that "there are no indications of a direct risk of contagion for Swiss institutions due to the current turmoil in the U.S. banking market."
"We welcome the statement of support," Credit Suisse said.
The Swiss lender would be the first globally systemically important bank to receive a bespoke lifeline, compared with liquidity offered by central banks to the financial sector generally in times of extreme market stress, such as when economies went into lockdown to combat COVID-19.
Shares in Credit Suisse, which is battling to recover from a string of scandals, have taken a hammering over the last 12 months. The stock was worth around 80 Swiss francs in 2008, but had dwindled to 1.55 Swiss francs on Wednesday.
The latest fall was triggered when its largest shareholder, Saudi National Bank, said it could not provide further financial help for the embattled lender. Wealthy clients had already pulled billions from the bank.
Credit Suisse is in the midst of a major overhaul, cutting costs and jobs and creating a separate business for its investment bank.
CEO Ulrich Koerner had earlier sought to calm nerves, saying the bank's liquidity was strong.
On Tuesday it suffered a fresh setback when it published its annual report for 2022, identifying "material weaknesses" in controls over financial reporting.
The report had been delayed last week following a last-minute call from the U.S. Securities and Exchange Commission (SEC), which raised questions with the bank.
Reporting by Noele Illien, John Revill and Tom Sims; Editing by John O'Donnell and Daniel Wallis