The American banking crisis spread to Europe

Shares in the world’s 50 largest banks, Swiss Credit Suisse, fell 24%, leading to a halt to trading on the stock market and taking the entire European banking sector with it. Shares of another Swiss bank UBS fell 7%, Societe Generale 10%, Deutsche bank fell 8%, Commerzbank 9%, Raiffeisenbank and Santander fell 6%, UniCredit fell 7%.

Credit Suisse collapsed after a series of negative news regarding the bank itself. The Bank recognized the ineffectiveness of the group’s internal control over financial reporting in 2021 and 2022. The bank stressed that addressing these shortcomings “may require significant resources”. During the year, 51 billion Swiss francs (about 28%) were withdrawn from the bank.

But Credit Suisse’s main shareholder, the National Bank of Saudi Arabia, said it was not ready to pledge money to save the Swiss bank.

“The answer is absolutely no, for many reasons beyond the simplest of regulatory,” Saudi Arabia’s Central Bank Governor Ammara Al Hudayri told Bloomberg.

The panic in the shares of European banks comes against the background of the banking crisis in the United States – the collapse swept Silicon Valley Bank, Silvergate Bank and Signature bank, local depositors withdrew tens of billions of dollars from regional banks.