Credit Suisse Culls Nine of Its Infamous ETNs Post UBS Takeover
The Swiss banking giant Credit Suisse has recently announced that it will be culling nine of its exchange-traded notes (ETNs) following its takeover of UBS. The move is part of a larger effort to streamline the bank’s operations and reduce its exposure to risk.
Background of Credit Suisse
Credit Suisse is one of the largest banks in Switzerland and is a major player in the global financial markets. It has a long history of providing banking services to individuals, corporations, and governments. The bank has been in operation since 1856 and has grown to become one of the largest financial institutions in the world.
UBS Takeover
In October of 2020, Credit Suisse announced that it had reached an agreement to acquire UBS, one of its main competitors in the Swiss banking market. The deal was valued at $13.7 billion and was seen as a major step forward for Credit Suisse in its efforts to become a global banking powerhouse.
Culling of ETNs
As part of the takeover, Credit Suisse has decided to cull nine of its ETNs. These ETNs are a type of financial instrument that allow investors to gain exposure to a variety of assets without having to purchase the underlying asset. The nine ETNs that are being culled are:
– Credit Suisse AG – VelocityShares Daily Inverse VIX Short-Term ETN
– Credit Suisse AG – VelocityShares Daily Inverse VIX Medium-Term ETN
– Credit Suisse AG – VelocityShares Daily Inverse VIX Long-Term ETN
– Credit Suisse AG – VelocityShares Daily 2x VIX Short-Term ETN
– Credit Suisse AG – VelocityShares Daily 2x VIX Medium-Term ETN
– Credit Suisse AG – VelocityShares Daily 2x VIX Long-Term ETN
– Credit Suisse AG – VelocityShares Daily 3x Long VIX ETN
– Credit Suisse AG – VelocityShares Daily 3x Inverse VIX Short-Term ETN
– Credit Suisse AG – VelocityShares Daily 3x Inverse VIX Medium-Term ETN
The decision to cull these ETNs is part of Credit Suisse’s larger effort to reduce its exposure to risk. The bank has stated that it believes that these ETNs are too risky and that they could potentially expose the bank to significant losses.
Reasons for Culling ETNs
The decision to cull these ETNs is part of Credit Suisse’s larger effort to reduce its exposure to risk. The bank has stated that it believes that these ETNs are too risky and that they could potentially expose the bank to significant losses.
The ETNs in question are linked to the VIX index, which is a measure of market volatility. The VIX index is known to be highly volatile and can move quickly in either direction. This means that investors who purchase these ETNs could potentially be exposed to significant losses if the market moves against them.
In addition, the ETNs are also linked to leveraged products, which means that investors could potentially be exposed to even greater losses if the market moves against them. This is why Credit Suisse has decided to cull these ETNs in order to reduce its exposure to risk.
Impact of ETN Culling
The decision to cull these ETNs will have a significant impact on investors who have purchased them. The ETNs will be delisted from the exchanges on which they are traded and investors will no longer be able to trade them. This means that investors who have purchased these ETNs will be unable to sell them and will be stuck with them until they mature.
In addition, the ETNs will no longer be available for purchase, which means that investors who were looking to gain exposure to the VIX index will no longer be able to do so through these ETNs. This could potentially have a negative impact on the market as a whole, as investors may be less likely to invest in products that are linked to the VIX index.
Conclusion
Credit Suisse has recently announced that it will be culling nine of its exchange-traded notes (ETNs) following its takeover of UBS. The move is part of a larger effort to streamline the bank’s operations and reduce its exposure to risk. The decision to cull these ETNs will have a significant impact on investors who have purchased them, as they will no longer be able to trade them or purchase them. This could potentially have a negative impact on the market as a whole, as investors may be less likely to invest in products that are linked to the VIX index.