Credit Suisse is in serious trouble
Shares of Swiss bank Credit Suisse plunged 20% as a Saudi investor refused to take a stake.
European bank shares fell after the value of Swiss bank Credit Suisse fell to a new record low. On Wednesday, March 15, according to Reuters.
Shares of Credit Suisse fell below 2 Swiss francs for the first time, as the lender’s largest shareholder, the National Bank of Saudi Arabia, said it could not provide it with additional bailouts.
“We can’t because otherwise we would have to exceed the stake in the bank above the current 10%. It’s a matter of regulation,” Saudi National Bank Chairman Ammar Al Hudayri said on Wednesday.
It is noted that the shares of the Swiss bank fell by more than 22%. Trading in shares was stopped several times by the stock exchange operator.
“We are moving from the problems of American banks to the problems of European banks, primarily Credit Suisse,” said Carlo Franchini, head of institutional clients at Banca Ifigest in Milan.
According to him, this pulls down the entire banking sector in Europe. At the same time, Franchini expressed confidence that the Credit Suisse crisis could be resolved and the bank would not be allowed to go bankrupt.
Due to Credit Suisse problems, the shares of the largest European banks fell sharply.
The index of European bank stocks fell 5%, hitting its lowest level since January 4. Shares of the Swiss bank UBS fell 6.8%. Shares of French banks BNP Paribas and Societe Generale fell 8.7% and 9.5%, respectively. The Spanish bank Banco de Sabadell and the German Commerzbank fell in price by 6.5-7.5%.
Recall that on March 10, the US financial regulator closed the California Silicon Valley Bank. His bankruptcy was the largest since the 2008 financial crisis. Following SVB, the American authorities closed the New York Signature Bank.
Due to the bankruptcy of SVB, global financial stocks lost $465 billion.
US President Joe Biden addressed the nation and said that “Americans can be sure that the banking system is safe.”
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