The European banking sector is facing the serious shocks of the recent collapse of the Silicon Valley Bank and Signature Bank in the USA triggering a wave of concerns for the vulnerable Credit Suisse.
The share of the Swiss bank lost up to 24% and retreated below the psychological limit of 2 francs (1.7 francs), sinking to the lowest level of all time.
In fact, stock market authorities were recently forced to suspend trading in the shares of both Credit Suisse and Societe Generale, which was also under strong pressure. The shares of several Italian banks also went on hold.
The new barrage of liquidations is related to the intervention of the largest shareholder of Credit Suisse, namely the Saudi National Bank, which ruled out the possibility of “throwing” more money, as it does not want its percentage to exceed the 10% limit (today it is at 9.9%).
A little earlier, the president of Credit Suisse, Axel Lehmann, had ruled out the possibility of state aid, making it clear that such a thing is not on the agenda.
The Swiss bank’s slump is understandably dragging down other banking stocks too, with the Euro Stoxx Banks index down 5.8% to its lowest level since early January.
The French BNP Paribas, on the other hand, is losing at least 8%, while pressure is also being exerted on the shares of Greek banks, with Alpha Bank falling by up to 8.8%.
In this context, the pan-European Stoxx 600 shows strong losses at -2.88% and 436 points, as the German DAX falls by 3.18%, the British FTSE 100 by 2.58%, the French CAC 40 by 3.64% and the Italian FTSE MIB by 3.97%.
The impact of the falling banking stocks in Europe reached the other side of the Atlantic, with the Dow Jones futures predicting a plunge of almost 600 points. Heavy losses are also expected in the S&P 500 – Nasdaq.