By Luis Miguel Tejada

For Switzerland’s Credit Suisse the 2022 calendar year could not have ended any sooner. Headwinds for this banking group were plentiful, highlighted by a sharp credit risk spike and poor stock performance (Figure 1). The first month of 2023 brought some solace for Credit Suisse, with it being the first time over the last twelve months that the mid-spreads for the 5-year Credit Default Swap (CDS) saw a month-over-month reduction (-22%). However, this proved to be just a momentary relief as mid-spreads for Credit Suisse’s 5-year CDS rose back 16% in the two weeks following the end of January.