Bailout Blues: The Write-Down of the AT1 Bonds in the Credit Suisse Bailout

Paz Valbuena, J; Eidenmüller, H

COVID-19 Collection

Journal article

Bailout Blues: The Write-Down of the AT1 Bonds in the Credit Suisse Bailout

Abstract:: This thesis investigates how financial institutions navigated the COVID-19 recession (2020–2021) and the subsequent energy and inflation crisis (2021–2023), with a focus on identifying the internal strategic and leadership factors that contributed to either institutional resilience or collapse. While much of the existing literature emphasizes macroeconomic drivers, regulatory failures, or market contagion, few studies explore how banks responded internally to systemic shocks through strategy, governance, and adaptive capabilities. To address this gap, the study adopts a qualitative, multiple-case study approach, analyzing six institutions: Silicon Valley Bank, Credit Suisse, and First Republic Bank (non-resilient cases), and JPMorgan Chase, HSBC, and Nordea (resilient cases). Data was gathered exclusively from secondary sources, including company annual reports, regulatory filings, journal articles and highquality financial journalism. The analysis was guided by four theoretical lenses: Dynamic Capabilities Theory, Transformational and Situational Leadership Theory, Organizational Resilience Theory, and the Strategic Agility Framework. Findings reveal that resilient banks shared several key characteristics: early risk sensing, cohesive and stable leadership, operational flexibility, strong digital infrastructure, and the ability to reallocate resources quickly. These institutions maintained continuity and stakeholder confidence during periods of disruptions. In contrast, the failed banks were marked by delayed responses, fragmented leadership, and limited adaptability despite having strong reputations or technological capabilities. This research contributes to the literature by integrating firm-level strategy and leadership theory into crisis response analysis. It offers practical insights for financial executives and policymakers, highlighting the importance of pre-crisis investment in agility, leadership stability, and systemic preparedness as critical enablers of institutional survival during economic shocks

Publication status:: Published

Peer review status:: Peer reviewed

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APA Style

Paz Valbuena, J., & Eidenmüller, H. (2023). Bailout Blues: The Write-Down of the AT1 Bonds in the Credit Suisse Bailout. European Business Organization Law Review, 24(3), 409–419.

MLA Style

Paz Valbuena, J, and H Eidenmüller. “Bailout Blues: The Write-Down of the AT1 Bonds in the Credit Suisse Bailout.” European Business Organization Law Review, vol. 24, no. 3, 2023, pp. 409–19.

Chicago Style

Paz Valbuena, J, and H Eidenmüller. 2023. “Bailout Blues: The Write-Down of the AT1 Bonds in the Credit Suisse Bailout.” European Business Organization Law Review 24 (3): 409–19.
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