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".