Credit Suisse Shares Plummet, European Banking Sector Experiences Black Day on Stock Market
Credit Suisse, Switzerland’s second-largest bank, has experienced a significant fall in its shares, with the price plummeting more than 20% on the Zurich Stock Exchange. The banking sector in Europe has also been affected, registering significant losses. This follows the collapse of the US bank Silicon Valley Bank, which had to be rescued by authorities due to the flight of deposits. The Saudi National Bank, Credit Suisse’s largest shareholder, has ruled out a new capital increase to help the bank, causing panic among investors.
Material weaknesses were identified in Credit Suisse’s internal controls over financial reporting, according to its 2022 annual report released yesterday. The bank had delayed its publication the week before. Credit Suisse has now requested a show of support from the Swiss regulator, the Swiss National Bank.
Investor Distrust in the Banking Sector
The collapse of Credit Suisse and Silicon Valley Bank has led to investor distrust in the banking sector, with suspicion spreading among investors in case similar bank failures occur in Europe. As a result, the European banking sector experienced a black day on the stock market, with entities such as BNP Paribas, Société Générale, Commezbank, and Deutsche Bank registering significant losses.
Spanish banks were also affected by the collapse of Credit Suisse, with Banco Sabadell, BBVA, and Santander leading the biggest falls. The Ibex 35, the main reference index of the Spanish stock market, closed with a fall of 4.7%, the biggest drop since November 2021.
Q: What caused the collapse of Credit Suisse’s share price?
A: Credit Suisse’s share price collapsed due to the identification of material weaknesses in its internal controls over financial reporting, as well as the Saudi National Bank ruling out a new capital increase to help the Swiss bank.
Q: How has the collapse of Credit Suisse affected the European banking sector?
A: The collapse of Credit Suisse has affected the European banking sector, causing significant losses in entities such as BNP Paribas, Société Générale, Commezbank, and Deutsche Bank.
Q: What was the reaction of Spanish banks to the collapse of Credit Suisse?
A: Spanish banks, including Banco Sabadell, BBVA, and Santander, suffered significant corrections in response to the collapse of Credit Suisse. The Ibex 35, the main reference index of the Spanish stock market, closed with a fall of 4.7%.
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