Outlook: Credit Suisse

THE DEFINITION of an emerging market, the old joke goes, is one from which it is impossible to emerge in an emergency. Old it may be, but Credit Suisse plainly never heard it, let alone heeded it. After Credit Suisse First Boston's less than helpful statement a couple of weeks back on how much had been lost in the Russian crisis, the parent company, Credit Suisse, yesterday came clean.

The full technicolour version is disturbing in the extreme. The bank's remaining unprovisioned exposure to Russia alone is just over $2bn. Taking in Indonesia, Brazil and other emerging markets, the amounts outstanding add up to rather more than $8bn. If Credit Suisse were to adopt the same approach as Barclays, and write off 90 per cent of its exposure to these markets, the effect would be to wipe out its entire disclosed reserves and some. And that's assuming we now have the whole picture.

CSFB may be an extreme case, but there are many others badly burnt by the events of the past nine months. No wonder so many bankers are talking about a world-wide credit crunch, stretching from the developing world right through to the major industrial nations. After losses like these, the natural instinct of all bankers will be just to say no - however good the proposition.