'The weakest links are cracking': Investors consider possible Credit Suisse contagion

Shares of Credit Suisse surged connected Thursday, rebounding from a caller all-time debased aft the beleaguered lender announced that it would pat cardinal slope enactment to enactment up its finances.

Switzerland's second-largest slope said it would get up to 50 cardinal Swiss francs ($53.68 billion) from the Swiss National Bank, providing a infinitesimal of alleviation for investors aft the Zurich-headquartered steadfast led Europe's banking assemblage connected a wild thrust lower during the erstwhile session.

The Swiss-listed banal terms was trading astir 24% higher astatine 11 a.m. London clip (7 a.m. ET) — a monolithic plaything from Wednesday's more than 30% tumble aft its biggest backer said it wouldn't supply further assistance owed to regulatory restrictions.

The abrupt nonaccomplishment of assurance successful Credit Suisse, which came arsenic fears astir the wellness of the banking strategy spread from the U.S. to Europe, has prompted immoderate to question the "true" worthy of Credit Suisse's banal price.

"We person to measurement backmost and look of people astatine the viability of the concern exemplary [and] astatine the wide regulatory landscape," Beat Wittmann, president of Switzerland's Porta Advisors, told CNBC's "Squawk Box Europe" connected Thursday.

"I deliberation the enactment of the slope has to truly usage present this lifeline to reappraisal their program due to the fact that obviously, the superior markets person not bought the program arsenic we person seen by the performances of the equity terms and the recognition default swaps precise recently."

Asked for his views connected the crisp autumn of Credit Suisse's stock terms — which fell beneath 2 Swiss francs for the archetypal clip connected Wednesday — Wittmann said a "brutal" monetary tightening rhythm led by large cardinal banks successful caller months meant companies susceptible to shocks were present opening to "really suffer."

"The weakest links are cracking and that's conscionable happening, and that was wholly predictable — and this volition not beryllium the past one. Now it is truly clip for policymakers to reconstruct assurance and liquidity successful the system, beryllium it successful the U.S., beryllium it successful Switzerland, oregon beryllium it determination else," Wittmann said.

Asked for his proposal to investors amid the marketplace turmoil, helium said: "The upside momentum successful ostentation and involvement rates is receding precise intelligibly truthful I deliberation determination is simply a precise steadfast underpinning successful superior markets."

"But I would precise powerfully urge sticking to high-quality companies — that means beardown management, beardown equilibrium sheets, beardown worth proposition. And present you tin prime them up astatine much charismatic valuations," Wittmann added.

Even earlier the daze illness of two U.S. banks past week, Credit Suisse has been beset with problems successful caller years, including money laundering charges and spying allegations.

The bank's disclosure earlier this week of "material weaknesses" successful its reporting added to capitalist concerns.

Credit Suisse absorption said Wednesday, however, that its latest measurement to unafraid a sizable backing woody showed "decisive action" to fortify the business. They thanked the Swiss National Bank and the Swiss Financial Market Supervisory Authority for their support.

Analysts welcomed the determination and suggested fears of a caller banking situation whitethorn beryllium overstated.

"A stronger liquidity presumption and a backstop provided by the Swiss National Bank with the enactment from Finma are positive," Anke Reingen, an expert astatine RBC Capital Markets, said Thursday successful a probe note.

"Regaining spot is cardinal for the CS shares. Measures taken should supply immoderate comfortableness that a spillover to the assemblage could beryllium contained, but the concern remains uncertain," she added.

Analysts astatine UBS, meanwhile, said marketplace participants were "grappling with 3 interrelated but antithetic issues: slope solvency, slope liquidity, and slope profitability."

"In short, we deliberation slope solvency fears are overdone, and astir banks clasp beardown liquidity positions," they added.

For Dan Scott, caput of multi-asset absorption astatine Swiss plus manager Vontobel — who utilized to enactment astatine Credit Suisse — it's not each atrocious news.

"I would accidental that Credit Suisse specifically is inactive 1 of the world's largest plus managers, it has fractional a trillion successful assets, and surely this could beryllium a large turnaround communicative if the execution communicative is good," helium told CNBC's "Squawk Box Europe" connected Thursday.

Asked by CNBC's Geoff Cutmore whether this would mean investors staying diligent contempt marketplace turbulence and the standard of outflows from the bank, Scott replied, "Absolutely. But I deliberation again that the accent that we're seeing astatine the infinitesimal truly should person been predictable."

"When rates spell up truthful fast, definite concern models get challenged and I don't deliberation it is simply a wealthiness absorption concern exemplary that gets challenged. I deliberation overmuch much and wherefore we saw it astatine Silicon Valley Bank, is backstage markets are going to beryllium challenged," Scott added.