ZURICH, March 30 (Reuters) – Switzerland’s 250 billion Swiss franc lifeline thrown to Credit score Suisse (CSGN.S) and UBS (UBSG.S) might value them greater than 10 billion francs ($10.95 billion) in curiosity if utilized in full, Reuters calculations based mostly on official knowledge confirmed.
Credit score Suisse can pay an rate of interest equal to the present Swiss Nationwide Financial institution’s coverage price of 1.5% plus 0.5% for entry to the emergency liquidity help (ELA) scheme, the central financial institution stated on Thursday.
The ability requires loans to be coated by collateral within the type of mortgages and pledged securities.
In measures introduced alongside the emergency takeover of Credit score Suisse by rival UBS engineered by the authorities, the 2 banks had been additionally given entry to 100 billion francs in extra liquidity help (ELA+).
This central financial institution help is on the market to the banks at an curiosity of three% plus its coverage price.
Credit score Suisse was additionally given entry to a further 100 billion franc public liquidity backstop, for which it has to pay a 3% danger premium evenly cut up between the nationwide financial institution and the Swiss state.
On high of this Credit score Suisse owes Switzerland a 0.25% dedication premium for the general public liquidity backstop.
The circumstances provided to the Swiss banks are decrease than the 4% – 8% rates of interest on high of the central financial institution’s coverage price, provided to Switzerland’s electrical energy suppliers final 12 months as a part of a ten billion franc emergency state credit score line.
($1 = 0.9135 Swiss francs)
Reporting by Noele Illien and John Revill
Modifying by Tomasz Janowski
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