Banking crisis

Shares of Swiss bank lose more than a quarter of their value in one day, dragging down European and US markets.

“We thank the SNB and FINMA [Swiss Financial Market Supervisory Authority] as we execute our strategic transformation,” Körner said. In a statement on Thursday, Credit Suisse Chief Executive Ulrich Körner said the measures “demonstrate decisive action to strengthen Credit Suisse as we continue our strategic transformation to deliver value to our clients and other stakeholders”. Credit Suisse said on Thursday the loan from the Swiss National Bank (SNB) would support the bank’s core businesses as it took the “necessary steps to create a simpler and more focused bank built around client needs”.

People walk by the New York headquarters of Credit Suisse on March 15, 2023 in New York City. Spencer Platt | Getty Images. This report is from today's CNBC Daily Open, our new, international markets newsletter. CNBC ...

[could make a recession arrive sooner](https://www.cnbc.com/2023/03/15/a-recession-could-come-sooner-on-cooling-bank-lending-.html). [banking stocks plunged 7%](https://www.cnbc.com/2023/03/15/european-markets-live-updates-stocks-data-news-and-earnings.html). Echoing that view, Goldman Sachs on Wednesday [lowered its growth forecast for the U.S.](https://www.cnbc.com/2023/03/15/goldman-sachs-cuts-gdp-forecast-because-of-stress-on-small-banks.html) by 0.3 percentage points to 1.2%. But the Swiss bank's problems really began in 2021, when it lost billions (and credibility) in the Archegos hedge fund scandal — which eventually led to [a dramatic restructuring](https://www.cnbc.com/2022/10/27/credit-suisse-results-and-strategy-q3-2022-earnings-and-overhaul.html) late last year. The renewed volatility in the banking sector — along with Its shares tanked 24.24% after its largest investor, Saudi National Bank, said it [couldn't provide the Swiss bank with further financial assistance](https://www.cnbc.com/2023/03/15/credit-suisse-shares-slide-after-saudi-backer-rules-out-further-assistance.html)due to regulations. Banks, Boockvar said on CNBC's "Squawk Box," are going to "focus more on firming up balance sheets" than on lending. The Nasdaq Composite posted a small gain of 0.05% — technology stocks, such as Netflix (which gained 3%) and Alphabet (which was up 2.28%) managed to avoid the banking downturn. — which appeared to be contained just yesterday — spread to Europe on Wednesday in the form of Credit Suisse. On Tuesday, Credit Suisse acknowledged " Swiss regulators added that Credit Suisse is well capitalized, seeking to assuage fears. Like what you see?

As the Federal Reserve began raising rates last year, venture capital dried up, leading startups to burn cash. To meet accelerating withdrawals, SVB was forced ...

The Federal Reserve, meanwhile, is [rethinking a number of its rules](https://www.wsj.com/articles/fed-to-consider-tougher-rules-for-midsize-banks-after-svb-signature-failures-4453fe5d?mod=article_inline)related to midsize banks. [shares hit a new low](https://www.wsj.com/articles/credit-suisse-shares-plunge-as-bank-storm-spreads-to-europe-7251349d?mod=article_inline)as worries about the financial system spread across the Atlantic. Shares of First Republic and other regional bank stocks [continue to slide](https://www.wsj.com/articles/bank-stocks-are-taking-their-worst-beating-since-the-covid-scare-d835a0cc?mod=article_inline). S&P Global Ratings [downgrades First Republic’s credit rating to junk status](https://www.wsj.com/livecoverage/stock-market-news-today-03-15-2023/card/first-republic-hit-with-four-notch-credit-downgrade-Y6dotSFMkY9c2N28oE7V?mod=article_inline), citing its elevated risk of deposit outflows and profitability pressures. [in separate probes](https://www.wsj.com/articles/justice-department-sec-investigating-silicon-valley-banks-collapse-c192c2b2?mod=article_inline), The Wall Street Journal reports. [emergency measures](https://www.wsj.com/articles/federal-reserve-rolls-out-emergency-measures-to-prevent-banking-crisis-ba4d7f98?mod=article_inline)to stem the fallout from Silicon Valley Bank’s failure. [wipe out a combined $52 billion in the market value](https://www.wsj.com/livecoverage/stock-market-news-today-03-09-2023/card/four-biggest-u-s-banks-lose-47-billion-in-market-value-8fmAmiqs4PDb1F60OSFg?mod=article_inline)of JPMorgan Chase, Bank of America, Wells Fargo and Citigroup. They also announce [a new lending program for banks](https://www.wsj.com/livecoverage/stock-market-news-today-03-13-2023/card/meet-the-btfp-the-fed-s-2023-crisis-facility-Bn7TsQpropbMiW1Z3kdp?mod=article_inline). [Shares of SVB are halted](https://www.wsj.com/livecoverage/stock-market-news-today-03-10-2023/card/svb-stock-price-slides-another-29-premarket-gdGa9ANN0vNESUUorGqm?mod=article_inline)Friday morning after a premarket selloff. Soon after, federal regulators announce they have [taken control of the bank](https://www.wsj.com/articles/svb-financial-pulls-capital-raise-explores-alternatives-including-possible-sale-sources-say-11de7522?mod=article_inline)before it can open. The bank says client cash burn has remained elevated, and increased further in February, leaving its deposits at the end of that month lower than it expected. As the tech industry boomed, it funneled large amounts of its surging deposits into investments such as U.S.

A number of regional banks continued to see steep declines in their share prices on Wednesday in the wake of the abrupt failure of Silicon Valley Bank late ...

He’s [faced criticism](https://thehill.com/homenews/senate/3900394-biden-bank-rescue-provokes-gop-uproar/) from many on the right over the rescue operation for the Silicon Valley and Signature banks, but [underscored](https://thehill.com/homenews/administration/3897534-biden-stresses-that-silicon-valley-bank-is-not-getting-a-bailout/) that the American taxpayer won’t bear the cost. [See all Hill.TV](https://thehill.com/hilltv) [See all Video](https://thehill.com/video) [Administration](https://thehill.com/homenews/administration/) [Senate](https://thehill.com/homenews/senate/) [Administration](https://thehill.com/homenews/administration/) [Business](https://thehill.com/business/) [See All](https://thehill.com) [stressed](https://thehill.com/homenews/administration/3897516-biden-says-our-banking-system-is-safe-amid-silicon-valley-bank-fallout/) that the U.S. [Business](https://thehill.com/business/) [Banking & Financial Institutions](https://thehill.com/business/banking-financial-institutions/) [Banking & Financial Institutions](https://thehill.com/business/banking-financial-institutions/) [News](https://thehill.com/homenews/) [See All](https://thehill.com/business/banking-financial-institutions/) When New York’s Signature Bank was shuttered on Sunday, it became the second-largest failure in that period. [Banking & Financial Institutions](https://thehill.com/business/banking-financial-institutions/)

Some say the failures of SVB and Signature Bank will spark contagion through the industry. But others are more sanguine.

Recent bank failures are rocking the banking industry. Here's everything you need to know about the situation.

The Fed says that its response to the closures of Silicon Valley Bank and Signature Bank will fully protect all deposits, regardless of whether they’re insured. Biden criticized this rollback in his speech and suggested that greater regulation of banks is needed to keep the banking system secure. [was closed](https://www.fdic.gov/resources/resolutions/bank-failures/failed-bank-list/signature-ny.html) by New York regulators, citing the bank as a systemic risk to the financial system’s stability. Silicon Valley Bank (SVB) is the first bank to fail since late 2020. [announced it was creating this emergency program](https://www.federalreserve.gov/newsevents/pressreleases/monetary20230312a.htm) that would provide loans as an additional source of liquidity, so that institutions are less likely to quickly sell high-quality securities (such as Treasuries) to meet withdrawal needs. SVB was previously one of the largest banks serving the tech startup industry — and the 16th largest bank in the U.S. Following the collapse of SVB, both the U.S. At least one other bank — New York-based Signature Bank — has closed its doors in the wake of SVB’s failure, marking the third largest bank failure in U.S. Here’s the breakdown of the latest news. Likewise, the Fed is taking steps to prevent further damage to the banking system and strengthen trust among consumers, who are on edge as other banks face pressure. [sharp price declines in bank stocks](https://www.bankrate.com/investing/bank-stocks-and-etfs-bank-collapse/). After the bank was forced to sell bonds at a loss, its stock price plummeted and depositors panicked, leading to a classic bank run.

Silicon Valley Bank's collapse should set off alarm bells at financial institutions worldwide. Those words were spoken on Wednesday morning by Axel Lehmann, ...

[two days](https://fortune.com/2023/03/10/why-did-silicon-valley-bank-collapse-explainer/), issues with Credit Suisse have been well known to the public for years after a series of mishaps. The European Central Bank has so far [declined to comment](https://www.cnn.com/2023/03/15/investing/credit-suisse-shares-saudi-national-bank/index.html) publicly on Credit Suisse’s standing. The bigger question is whether a Credit Suisse collapse combined with the troubles in U.S. [seized](https://fortune.com/2023/03/12/nyc-based-signature-bank-fails-closed-by-regulators-fdic-treasury/) by federal regulators on Sunday. Meanwhile, traders [piled into credit default swaps](https://markets.businessinsider.com/news/stocks/credit-suisse-cds-spreads-bond-insurance-stock-price-banking-contagion-2023-3), indicating the market expects the bank to default on its debt. Capital Economics analysts wrote that Credit Suisse’s problems “do not come as a complete shock” to either investors or government officials. “Credit Suisse is not just a Swiss problem but a global one.” “Credit Suisse is in principle a much bigger concern for the global economy than the regional U.S. [a record low](https://fortune.com/2023/03/15/dow-down-over-500-points-as-credit-suisse-sell-off-in-europe-spurs-fresh-bank-fears/) before trading was halted. A banking crisis resulting from SVB’s collapse seemed to have been momentarily averted last weekend when the government stepped in with It’s a regulatory issue,” SNB chairman Ammar Al Khudairy [told Reuters Wednesday.](https://www.reuters.com/business/finance/credit-suisses-saudi-backer-happy-with-transformation-plan-doesnt-think-extra-2023-03-15/) But after a dramatic bank stock rout on Wednesday, it looks like Credit Suisse itself could be the catalyst for an even larger banking crisis.

When confidence in a bank or two is shaken, investors skittishly search for the next potential victim, pushing down bank stocks across the board.

Now, the crisis of confidence [has spread](https://www.barrons.com/articles/credit-suisse-bank-stock-price-news-26868dbd?mod=hp_LEAD_1_B_1&mod=article_inline) to Switzerland’s ](https://www.barrons.com/market-data/stocks/sivb) ](https://www.barrons.com/market-data/stocks/si)

Credit Suisse on Thursday said it would borrow up to $54 billion from the Swiss central bank to shore up liquidity and investor confidence after a slump in ...

President Joe Biden and [emergency steps](/business/finance/regulators-urged-find-silicon-valley-bank-buyer-industry-frets-about-fallout-2023-03-12/) giving banks access to more funding. On the one hand, you are removing a source of risk to the markets which is a clear and present danger. Money market pricing suggested traders now saw less than a 20% chance of a 50 basis point rate hike at the ECB meeting. The more we do this, the more we blunt monetary policy, the more we have to live with higher inflation -- and what is it going to be?" In its statement early Thursday, Credit Suisse said it would exercise an option to borrow from the central bank up to 50 billion Swiss francs ($54 billion). The U.S. "We fulfil and overshoot basically all regulatory requirements." While the bank's announcement helped trim some of those losses, trade was volatile and sentiment fragile. "It does help. But it confronts us with another choice. It removes an immediate risk. [(CSGN.S)](https://www.reuters.com/companies/CSGN.S) on Thursday said it would borrow [up to $54 billion](/business/finance/credit-suisse-borrow-up-50-bln-swiss-francs-swiss-national-bank-2023-03-16/) from the Swiss central bank to shore up liquidity and investor confidence after a slump in its shares intensified fears about a global financial crisis.

After Silicon Valley Bank, USA's 16th largest bank collapsed last week, the banking sector has been thrown into a frenzy. The depositors are wary while the ...

Switzerland's second-largest bank Credit Suisse on Wednesday said it will borrow up to $54 billion from the Swiss central bank to shore up its finances. The bank has turned to the Swiss National Bank to strengthen liquidity. Credit rating agency Moody's on Wednesday sent the alarm bells ringing by revising its outlook of the US banking system. The Securities and Exchange Commission has also launched a parallel investigation, the publication said. The announcement was made after shares of the second-biggest bank in Switzerland nosedived to historic lows as its main shareholder declined to invest any money in the institution. The shares of the bank went for a freefall on the Swiss stock exchange, declining more than 30 per cent to hit a record low of 1.55 Swiss francs.

Credit Suisse tanked after its largest investor said it couldn't provide more financial assistance. Banks in the U.S. and Europe were slammed on the news.

[could make a recession arrive sooner](https://www.cnbc.com/2023/03/15/a-recession-could-come-sooner-on-cooling-bank-lending-.html). banking sector](https://www.cnbc.com/2023/03/15/financial-shares-fall-as-credit-suisse-becomes-latest-crisis-for-the-sector.html). Echoing that view, Goldman Sachs on Wednesday [lowered its growth forecast for the U.S.](https://www.cnbc.com/2023/03/15/goldman-sachs-cuts-gdp-forecast-because-of-stress-on-small-banks.html) by 0.3 percentage points to 1.2%. [indicator for the risk of default](https://www.cnbc.com/2023/03/16/risk-gauge-for-european-banks-is-surging-after-svb-collapse.html)is surging for Credit Suisse and other European banks. But the Swiss bank's problems really began in 2020 with a spying scandal, followed by a loss of billions (and credibility) in the 2021 Archegos hedge fund scandal — which eventually led to [a dramatic restructuring](https://www.cnbc.com/2022/10/27/credit-suisse-results-and-strategy-q3-2022-earnings-and-overhaul.html) late last year. [European banks' dramatic declines yesterday](https://www.cnbc.com/2023/03/15/european-markets-live-updates-stocks-data-news-and-earnings.html), fear leaped across the Atlantic and [infected the U.S. The renewed volatility in the banking sector — along with It's a common saying that interest rates work at a lag — first gradually, then suddenly. Banks, Boockvar said on CNBC's "Squawk Box," are going to "focus more on firming up balance sheets" than on lending. The Nasdaq Composite posted a small gain of 0.05% — technology stocks, such as Netflix (which gained 3%) and Alphabet (which was up 2.28%) managed to avoid the banking downturn. — which appeared to be contained just yesterday — spread to Europe on Wednesday in the form of Credit Suisse. On Tuesday, Credit Suisse acknowledged "

Shares in global investment bank Credit Suisse fell sharply on Wednesday sending shares plunging in other European banks and global markets.

At the close of trade in Europe on Wednesday, Credit Suisse’s stock price was down 24%, having recovered slightly from its lowest ebb during the day. The Swiss National Bank (SNB) and the Swiss Financial Market Supervisory Authority (FINMA) said in a statement that “the problems of certain banks in the USA do not pose a direct risk of contagion for the Swiss financial markets,” and pointed to “the strict capital and liquidity requirements” which applied to Swiss financial institutions. - The S&P 500 was down 0.69% at the close of trade [sudden collapse of Silicon Valley Bank](https://www.dw.com/en/silicon-valley-bank-collapse/a-64978863) in the US which forced authorities to intervene to prevent the spread of market disturbances. - Germany’s DAX had lost 3.32% at the close of trade in Europe Stocks fell in Europe and on Wall Street on Wednesday amid worries about the strength of banks on either side of the Atlantic.

West Texas Intermediate futures fell more than 6% to $66.85 per barrel. That would be WTI's biggest one-day drop since July 12, 2022.

The news led to a more than 20% drop in the bank's U.S.-listed shares. The Federal Reserve is slated to hold a policy meeting next week. "US policymakers have taken aggressive steps to shore up the financial system, but concerns about stress at some banks persists," they added. "Small and medium-sized banks play an important role in the US economy," Goldman economists wrote. "Now near the mid-$60s, WTI crude's plunge is at the mercy of how much worse the macro picture gets." [West Texas Intermediate](/quotes/@CL.1/) futures fell more than 5% to settle at $67.61 per barrel, reaching its lowest level since December 2021.

Fears over a banking crisis remained at the fore on Thursday after Credit Suisse said it would borrow up to 50 billion Swiss francs (£45 billion) from ...

Nerves are still frayed though and that has been evident during trade in Asia.” [Bank of England](/topic/bank-of-england) is said to have been in emergency talks with its global central banking counterparts last night as the crisis deepened, and was reportedly in touch with both Credit Suisse and the Swiss National Bank regarding the emergency loan. Shares in Credit Suisse lost more than a quarter of their value at one stage on Wednesday, hitting a record low after the bank’s biggest shareholder — the Saudi National Bank — said it would not put more money into the lender, and after the Swiss bank said it found “weakness” in its financial reporting.

Oil rose from the lowest close in 15 months after a three-day rout started by the US banking crisis and accelerated by options covering.

The New Zealand dollar recovery faltered through trade on Wednesday, sinking back below US$0.6200 amid new fears surrounding the health of the global.

With the USD and JPY buoyed, the GBP slid back below 1.21 and tested a break below 1.2025 before finding buyers. EUR/USD continues to trade in positive territory near 1.0600 despite having retreated from session highs. IMPORTANT: This information has been prepared for distribution over the internet and without taking into account the investment objectives, financial situation and particular needs of any particular person. Oz Forex Foreign Exchange makes no recommendations as to the merits of any financial product referred to in this website, emails or its related websites. With the bank issuing a public statement of support in a bid to obtain a liquidity backstop and markets in freefall the Swiss National Bank stepped in, announcing it will provide liquidity “if necessary”. [EUR/USD News](https://www.fxstreet.com/news?q=&hPP=17&idx=FxsIndexPro&p=0&dFR%5BTags%5D%5B0%5D=EURUSD) [GBP/USD loses traction, retreats below 1.2050](https://www.fxstreet.com/currencies/gbpusd) [GBP/USD News](https://www.fxstreet.com/news?q=&hPP=17&idx=FxsIndexPro&p=0&dFR%5BTags%5D%5B0%5D=GBPUSD) [Gold holds above $1,920 as US yields lose traction](https://www.fxstreet.com/markets/commodities/metals/gold) With risk off we expect the USD and JPY to remain well bid. We are keenly attuned to any news surrounding Credit Suisse and risks connected with other larger banking institutions with macro themes unlikely to have a significant impact until the dust settles. Just as confidence was beginning to recover, the shock of last week’s Silicon Valley Bank and Signature Bank collapse has investors again being thrown to the wolves. The New Zealand dollar recovery faltered through trade on Wednesday, sinking back below US$0.6200 amid new fears surrounding the health of the global financial system. With stocks plunging, panic intensified following reports the bank’s largest Shareholder (Saudi National Bank) rejected calls to provide capital should funding needs arise.

Battered Japanese bank stocks clawed back some of their heavy losses, as regulators and financial executives hosed down investor concerns about contagion ...

[(.SPLRCBNKS)](https://www.reuters.com/quote/.SPLRCBNKS) rebounded 1.4%, leaving it with a 26% loss over the past five sessions. * Traders currently see a 77% chance of a 25 basis-point increase at the meeting, while expectations for no rate hike have fallen to 23%. [urged confidence in the U.S. [(C.N)](https://www.reuters.com/companies/C.N) regained almost 6% and Wells Fargo [(WFC.N)](https://www.reuters.com/companies/WFC.N) added 4.6%. inflation data that was in line with expectations. First Republic Bank [(FRC.N)](https://www.reuters.com/companies/FRC.N) surged 27%, while KeyCorp [(KEY.N)](https://www.reuters.com/companies/KEY.N) jumped 7%. Markets and financial authorities remained on edge, however, with U.S. [(APO.N)](https://www.reuters.com/companies/APO.N), Blackstone Inc [(BX.N)](https://www.reuters.com/companies/BX.N) and KKR & Co Inc [(KKR.N)](https://www.reuters.com/companies/KKR.N) have expressed interest in a book of loans held by SVB, [Bloomberg News reported](/business/finance/apollo-blackstone-eye-svb-assets-bloomberg-news-2023-03-14/), citing people familiar with the matter. * U.S. [(SBNY.O)](https://www.reuters.com/companies/SBNY.O) association with crypto clients before regulators suddenly seized the lender last weekend, [Bloomberg](/markets/us/signature-bank-faced-criminal-probe-ahead-its-collapse-bloomberg-news-2023-03-15/) also reported. [(SCHW.N)](https://www.reuters.com/companies/SCHW.N) has ample liquidity, [the chief executive](/business/finance/charles-schwab-ceo-says-firm-has-liquidity-not-seeking-capital-or-deals-2023-03-14/) of the bank and brokerage said, moving to allay concerns about a "doomsday scenario" that has weighed broadly on bank stocks. [(GS.N)](https://www.reuters.com/companies/GS.N) was [the acquirer of a bond portfolio](/business/finance/goldman-sachs-bought-svbs-bond-portfolio-lender-says-2023-03-14/) on which it booked a $1.8 billion loss, a transaction that set in motion the failure of SVB.

William R. Rhodes & Stuart P.M. Mackintosh consider the role that deregulation played in the collapse of Silicon Valley Bank and Signature Bank.

The grounds for doing so – that such banks do not pose systemic risks to the stability of the US financial system – were clearly spurious. We can now see that, as in the 2007-08 financial crisis, panic can spread quickly from a small bank to larger ones, and then across borders and markets. Obviously, bank board members should not undermine the stability of their own firms; but that appears to be what happened here. In the case of SVB and Signature Bank, there is plenty of blame to go around. US President Joe Biden’s administration and the Federal Reserve have duly stepped in to prevent more panic-driven bank runs, and to shore up the broader financial system where needed. Unfortunately, everyone will have to relearn the hard-won lessons of past banking crises.