Credit Suisse “Under Pressure”

Credit Suisse (NYSE:CS) shares briefly sank to an all-time low this week while credit default swaps hit a record high, as the market’s skittishness about the Swiss bank’s future became abundantly clear.

The shares continued to recover Tuesday from the previous session’s low of 3.60 Swiss francs ($3.64), but were still down more than 53% on the year.

The embattled lender is embarking on a massive strategic review under a new CEO after a string of scandals and risk management failures, and will give a progress update alongside its quarterly earnings on Oct. 27.

Credit Suisse credit default swaps — derivatives that serve as a kind of insurance contract against a company defaulting on its debt — soared to a spread of more than 300 basis points Monday, well above that of the rest of the sector.

Credit Suisse CEO Ulrich Koerner last week sought to reassure staff of the Swiss bank’s “strong capital base and liquidity position” amid market concerns and a rise in credit default swaps.

In an internal memo sent to staff last week, Koerner promised them regular updates during this “challenging period” and said Credit Suisse was “well on track” with its strategic review.

“I know it’s not easy to remain focused amid the many stories you read in the media — in particular, given the many factually inaccurate statements being made. That said, I trust that you are not confusing our day-to-day stock price performance with the strong capital base and liquidity position of the bank.”

CS began Tuesday up 22 cents, or 5.5% to $4.23