Credit Suisse causes worldwide panic

Ammar Al Hudari, Chairman of the Board of Directors of Saudi National Bank, one of the largest shareholders of Switzerland-based Credit Suisse Group AG, said that it will not raise any more capital for its shares in Credit Suisse.

When asked whether Credit Suisse would welcome additional injections if it needed liquidity, Al Hudari replied, “Absolutely not, for regulatory and legal reasons and many other reasons.”

On top of that, with the decrease in the stock price of the bank exceeding 30 percent and the selling pressure spreading throughout the market, the Swiss National Bank announced that it could provide liquidity to Credit Suisse in case of need, and declared that the crisis was not at a scale that could spread to other banks.

Credit Suiss, which is often mentioned with bankruptcy claims after the bankruptcy of Silicon Valley Bank and Signature Bank, was also negatively affected by the banking crisis in the USA due to the problems it has been grappling with for a long time.

The US Treasury Department also announced that it is closely monitoring the issue, and according to sources close to the subject, an investigation was started with the Fed on how much the US financial sector could be affected by the Credit Suisse crisis.

On the other hand, the Norwegian Wealth Fund, one of the largest funds in the world, announced that it reduced its shares in Credit Suisse, which was going through difficult times, from 1.49 percent to 1 percent.

In the following statement, a statement was made that Credit Suisse would take steps to strengthen its liquidity by borrowing 54 billion dollars from the Swiss National Bank.

Credit Suisse shares fell as much as 31 percent yesterday on top of all this, while they were at record lows with 24 percent minus and 1,697 francs at the close. The daily trading volume of the shares broke a record with 300 million.

Shares of major European banks such as BNP, SocGen, ING and Deutsche Bank caused 10 percent or more decreases on yesterday's events. The euro fell more than 2% against the dollar, hitting its lowest level in two months. The iTraxx Crossover index, which calculates the cost of insuring European trash-level corporate bonds against a possible default, recorded the fastest daily rise in the last 3 years with 55 basis points yesterday, reaching its highest level since December.