Credit Suisse Slump Renews Fears Of Global Banking Crisis

[BBC] Shares in Credit Suisse have plunged and dragged down other major European lenders as fears about deeper problems in the world banking system have spread in the wake of bank failures in the United States.

Credit Suisse shares lost more than a quarter of their value on Wednesday, hitting a record low after the Swiss bank’s biggest shareholder, the Saudi National Bank, told news outlets that it would not inject more money into the bank, which was beset by problems long before the US banks collapsed.

The turmoil caused an automatic suspension in trading of Credit Suisse shares on the Swiss market and sent stock in other European banks tumbling, some by double digits.

That fanned new fears about the health of financial institutions following the recent collapse of Silicon Valley Bank and Signature Bank in the US.

Credit Suisse stock lost about 30 percent of its value, dropping to about 1.60 Swiss francs ($1.73) per share, before clawing back to a 24 percent loss at 1.70 francs ($1.83) in late afternoon trading on the SIX stock exchange. At its lowest, the price was down more than 85 percent from February 2021.

The Swiss central bank said on Wednesday evening that capital and liquidity levels at Credit Suisse were adequate but stressed it was ready to make liquidity available to the institution if needed.

Meanwhile, stocks on Wall Street fell again as worries grew about the strength of banks on both sides of the Atlantic.

The S&P 500 was 1.8 percent lower in afternoon trading, and the Dow Jones Industrial Average was down 620 points, or 1.9 percent, at 31,539 as of 1:11pm in New York (17:11 GMT) after earlier being down as many as 725 points. The Nasdaq composite was 1.1 percent lower.

Oil prices also plunged more than $5 a barrel to their lowest in more than a year as unease over the Swiss bank spooked world markets and offset hopes of a recovery in Chinese oil demand.