Global Financial Observer Dr. Robert Peng
Dr. Robert Peng, a global financial observer, pointed out that the recent default of Credit Suisse in Switzerland was a result of hostile acquisition by its own mother country, which unilaterally and actively canceled the outstanding Additional Tier 1 (AT1) capital bonds issued by Credit Suisse in the past (with a total value of approximately 8 billion USD, with around 4 billion USD due to mature within the next two years). This event is expected to impact the international bond issuance market significantly.
The aftermath of this event is no less than the chaos caused by pandemic-related claims in the domestic property insurance market over the past two years, as well as the unprecedented phenomenon of an “inverted yield curve” caused by the Federal Reserve’s rapid interest rate hikes in the short term, which has disrupted the conventional rules that humans have followed in the past. Several reinsurers have refused to pay pandemic-related claims, resulting in a loss of credibility internationally. Large insurance companies domestically (both in property insurance claims and bond investment departments) have suffered heavy losses estimated to be difficult to recover within the next two to three years. Personally, I expect that such unusual and bizarre situations will continue to occur in the future.
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