The effects of the banking crisis that started in the USA are widening.
The Saudi National Bank, the largest partner of Switzerland-based Credit Suisse, announced that it will not raise capital in the bank.
Panic selling followed the decision. Credit Suisse’s stock price fell by 25 percent.
Credit Suisse panic in Europe
The development also affected European stock markets.
The declines in Europe’s major banks gained momentum. Commerzbank tumbled 9 percent, Deutsche Bank 7.8 percent, and Barclays 6.6 percent.
The Swiss National Bank and the Swiss Financial Markets Regulatory Board took action on the growing concerns about Credit Suisse. It was announced that we are in close contact with the bank and that if necessary, liquidity will be provided to Credit Suisse.
First Republic Bank’s credit rating downgraded
In the USA, where two bankruptcies were experienced, the credit rating of California-based First Republic Bank fell.
International credit rating agency S&P downgraded the bank’s long-term credit rating from “A-” to “BB+”, and another international credit rating agency Fitch downgraded it from “A-” to “BB”.
Shares of First Republic Bank tumbled more than 20 percent after the credit rating downgrades.