fear induced market plunge has affected Credit Suisse and other banks
As per experts, a global domino effect can occur when stock markets plummet due to increasing fear
Yesterday's announcement regarding two bank takeovers by the FDIC and another bank being targeted caused fear in the market. As a result, Credit Suisse's stock plunged by 16%. Six months ago, the Saudi Bank purchased 9.9% of Credit Suisse's shares for $1.5 billion. Bank Chairman Amar Al-Khudeir said, "We got it at the floor price. It's trading at less than a quarter of the value, and it's a 160-year-old brand, the brand has a lot of value."
Today, as fear struck the market and President Joe Biden declared that there would not be any losses to taxpayers as happened in 2008, only damage to investors and stakeholders, the Saudi National Bank stated that it could not provide further financial assistance to the Swiss bank. "We cannot because we would go above 10%. It’s a regulatory issue," said the bank. Meanwhile, Wells Fargo (-4.6%), Citigroup (-5.2%), Goldman Sachs (-4.5%), and Morgan Stanley (-4%) all saw significant declines in their stock values, with the Nasdaq (-1.1%), the Dow Jones (-1.2%), and the S&P 500 (-1.5%) also experiencing losses. Additionally, First Republic Bank's stock plummeted by 22.2%.
Credit: Yahoo Finance
After suffering massive losses caused by endless scandals in 2022, Credit Suisse continues to slide down the slippery slope she climbed on. In the crisis of 2008, she suffered a loss of 8.2 billion Swiss francs. In 2022, the bank experienced a loss of 7.2 billion francs, with revenues dropping by 34% and deposits worth 111 billion Swiss francs being withdrawn.
Over the past year, the stock has eroded by 66.7%, and today it hit an all-time low, trading at 2.2 francs.
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