Sharp fall of Credit Suisse shares raises questions about a possible global economic contagion, or worse, a repeat of the 2008 financial crisis
Wall Street stocks dropped to negative territory on Wednesday, as banking shares in the US and Europe are hammered by worries that more lenders could fail, after a record low drop of almost a third of the shares of the global investment bank, Credit Suisse, the second largest bank in Switzerland.
As a result of the rout in Switzerland and across Europe, London's FTSE 100 index declined almost 4 percent as of 1630 GMT while the European index, STOXX Europe 600, was down almost 3 percent also as of 1630 GMT. But what happened to SVB and Signature Bank created a psychological ripple effect on investors' minds, leading some to believe that something similar could happen to Credit Suisse. While Credit Suisse is one of the most-respected banking institutions in the world, developments in recent months have led some experts to start questioning the company's financial strength.
When asked if the SVB collapse could adversely affect Credit Suisse, Koerner said that their situation is "very different". It has also ordered Credit Suisse to record the responsibilities of about 600 of its highest-ranking employees. "I don't think they will need extra money; if you look at their ratios, they're fine. And they operate under a strong regulatory regime in Switzerland and in other countries," Khudairy told Reuters news agency on the sidelines of a conference in Riyadh.
In an interview with The Guardian, Andrew Kenningham, chief Europe economist at Capital Economics, warned that what is happening at Credit Suisse is "in principle a much bigger concern for the global economy" compared to the collapse of the US regional banks.He said that if authorities act decisively, a resolution can be achieved without triggering "too much contagion".
Australia Latest News, Australia Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Biden defends ‘safe’ banking system amid biggest collapses since 2008President Biden on Monday defended the U.S. banking system after regulators scrambled to prevent the collapses of Silicon Valley Bank and Signature Bank from spiraling into a massive financial crisis.
Read more »
Paul Krugman: Silicon Valley Bank isn’t the Lehman Brothers of 2008Paul Krugman: 'SVB isn’t Lehman, and 2023 isn’t 2008. We probably aren’t looking at a systemic financial crisis. And while the government has stepped in to stabilize the situation, taxpayers probably won’t be on the hook for large sums of money.'
Read more »
Silicon Valley Bank collapse: White House urges calm as bank failure recalls 2008 crisisWASHINGTON—As federal regulators sift through the remains of Silicon Valley Bank, whose collapse last week recalled the 2008 liquidity crisis and sent shudders through the fragile post-pandemic economy, elected officials in Washington and elsewhere used the regional lender's demise to deploy their arguments for what went wrong.
Read more »
Bank failures evoke memories of IndyMac’s 2008 collapsePresident Joe Biden assured the nation that all depositors at Silicon Valley Bank and Signature Bank would be able to access their money, even if deposits are above the FDIC’s $250,000 limit.
Read more »