Risky Credit Suisse Bonds Quoted at Just Above Zero

The transcript discusses the market's reaction to FINMA's decision to wipe out 16 billion francs worth of bonds, which caused shockwaves. Despite this, traders are buying and selling these bonds at a fraction of their value, anticipating potential claims against Credit Suisse. The UBS-Credit Suisse merger is also examined, highlighting market uncertainty, paused share buybacks, and the need to divest non-core assets. The merger's long-term benefits are debated, with S&P lowering the bank's outlook due to execution risks.

What was the market's reaction to FINMA's decision to eliminate 16 billion francs worth of bonds?

• The bonds were immediately valued at zero.

• Traders continued to trade the bonds at a fraction of their value.

• Traders stopped trading the bonds entirely.

• The bonds increased in value unexpectedly.

Why are traders still interested in bonds that are supposed to be worth zero?

• They believe the bonds will increase in value soon.

• They anticipate potential claims against Credit Suisse.

• They are using the bonds for tax purposes.

• They are required to hold these bonds by regulation.

What is the expected timeline for the closure of the deal involving the bonds?

• Indefinitely postponed

• A few weeks

• Several months

• A year

How did the market initially react to the UBS and Credit Suisse merger?

• UBS shares remained stable.

• UBS shares initially dropped, then rose slightly.

• UBS shares were unaffected by the news.

• UBS shares consistently increased.

What challenge does UBS face following the merger with Credit Suisse?

• Integrating Credit Suisse's investment banking business

• Increasing the value of Credit Suisse's bonds

• Reducing the number of employees

• Expanding into new markets