After its panic attack of the previous day (-3.6%), the Paris Bourse recovered slightly on Thursday morning following the announcement by the Swiss authorities of measures to support Credit Suisse. The CAC40 index climbed 0.5% to 6,920 points.

In a press release issued yesterday evening, the Swiss Financial Market Supervisory Authority (FINMA) reassured investors that the Credit Suisse case, which had caused a disastrous session for the markets on Wednesday, was still on track.

FINMA considers that the Swiss bank fully meets the capital and liquidity requirements applicable to banks deemed to be of systemic importance.

The Swiss National Bank (SNB), for its part, has assured Credit Suisse that it is ready to provide sufficient liquidity should the need arise.

Credit Suisse immediately took the SNB at its word, declaring its intention to borrow up to 50 billion Swiss francs (around 50 billion euros) from the Swiss central bank.

Referring to "decisive" actions in a "preventive" logic, the group also announced its intention to buy back almost three billion Swiss francs worth of debt instruments in circulation on the markets.

All these announcements come at a time when the private bank's share price fell by more than 24% yesterday, amid concerns about its capitalization.

Frightened by the fall of Credit Suisse, all European stock markets tumbled yesterday. In Zurich, the SMI index dropped 1.9%, while in Frankfurt, the DAX fell 3.3%. The pan-European Euro STOXX 50 index was down 3.5%.

It is in this climate of confusion that the European Central Bank (ECB) will today hold its Governing Council meeting, eagerly awaited by investors.

The recent turmoil in the markets is unlikely to deter the central bank from raising rates by a further 50 basis points at the end of its meeting.

Beyond this decision, it is above all the speech by Christine Lagarde, the ECB's President, that will arouse interest as investors try to guess the future trajectory of rates.

Mrs. Lagarde will have to comply with the mandate and renew her commitment to fighting inflation without adding to the ambient volatility", warns Axel Botte, international strategist at Ostrum AM.

For strategists, reassuring words about the health of European banks and implicit support for the Old Continent's banking system would be welcome to sweeten the pill of rate hikes.

Generally speaking, investors are hoping that central banks will be more accommodating while they assess the fallout from the current crisis, which many attribute to tighter credit conditions.

However, a major difference between the current situation and previous episodes of banking crisis is a more solid macroeconomic backdrop, with persistent inflationary pressures in particular", points out Frederik Ducrozet, Head of Economic Research at Pictet Wealth Management.

"This will make it difficult to trade off inflation and financial stability risks, as central banks try to postpone rate cuts for as long as possible", he warns.

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