Tuesday, May 30News That Matters

Why $17 billion in Credit Suisse bonds became worthless

Troubled bank Credit Suisse will be acquired by Swiss rival UBS, a move engineered by the Swiss government in an effort to quell concerns of a financial crisis. While the takeover offered a momentary reprieve for bank industry observers, one aspect of the deal was, on its face, confounding: The Swiss government said that some $17 billion worth of Credit Suisse bonds would get marked down to zero, meaning their holders would lose all of their investment.

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