The Stockholm Stock Exchange’s broad index fell 3.8 percent on Wednesday – the worst stock market day since the summer of 2020. The Swiss bank Credit Suisse is at the center of the unrest. Last week it was three regional banks in the US that collapsed – this week it is the problems of the long-established bank Credit Suisse that are creating nervousness in the stock market. It is Europe’s 17th largest bank and is considered one of the systemically important banks. The bank fell 24 percent on the Zurich stock exchange on Wednesday. On Wednesday evening, the Swiss National Bank (SNB) and the Financial Supervisory Authority (FINMA) issued a press release to calm the situation – they promise to support the bank with money if needed. Saudi bank halts Credit Suisse has been dragged down by loss-making investments and criticized for poor customer controls, but on Tuesday, news came that sent the stock tumbling. Its largest owner, the Saudi National Bank, rules out further financial support for the bank. – We cannot go in with money because then we would own more than ten percent of the bank. It will be a regulatory problem, Saudi National Bank Chairman Ammar Al Khudairy told Reuters on Tuesday. He added that Credit Suisse’s restructuring plan was satisfactory, and that the bank probably does not need more capital. Broad declines for banks That was not enough to reassure investors. Credit Suisse fell 24 percent on the Zurich stock exchange on Wednesday, and several other banks around the world fell on the exchanges, although not by as much. On the Stockholm Stock Exchange, Helsinki-based Nordea fell by 7.7 percent, while the three major Stockholm-based banks – Handelsbanken, SEB and Swedbank – fell 4.2–5.4 percent. The US Securities and Exchange Commission (SEC) announced on Tuesday that it had suspended Credit Suisse’s annual report because it found “significant weaknesses” in the way it reported its finances. Wednesday’s inflation announcement was also a hard blow to the stock market. Inflation excluding interest and energy prices was 9.3 percent, compared to 8.7 percent the month before, which puts pressure on the Riksbank to raise the policy rate further.
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The big bank’s plunge is stressing savers – all over the world
