The sharp drop in Credit Suisse's stock price triggered a chain reaction, causing the global market to fall into panic again. There was a safe-haven scene where the US dollar and gold rose simultaneously, while European and American stock markets and crude oil prices suffered heavy losses.
As the largest shareholder of Credit Suisse Bank, the chairman of the National Bank of Saudi Arabia ruled out the possibility of providing more financial assistance to Credit Suisse in an interview on Wednesday, which led to a sharp increase in the default risk of Credit Suisse priced in the market, and the stock price fell at an accelerated rate. It had fallen more than 20% before the opening bell.
However, the impact did not stop at Credit Suisse's stock price plunge, but triggered a chain reaction of global financial market turmoil. As the worries caused by the bankruptcy of Silicon Valley Bank in the United States have spread to Europe, the risk of European banking industry has been slowly fermenting in recent days.
Germany's BaFin suspended the business of Silicon Valley Bank's German branch on Monday, but declared that the German subsidiary of Silicon Valley Bank will not pose a threat to the stability of the financial system. The French Finance Minister also came forward to reassure the market on Monday, saying that "there is no specific risk of contagion from the Silicon Valley Bank (SVB) incident, and the French banking industry is stable."
As the Federal Reserve and the U.S. Treasury Department took timely measures to deal with the bankruptcy of Silicon Valley Bank, which prevented the panic from intensifying, and the inflation data released by the U.S. showed no surprises, the market sentiment has basically stabilized on Tuesday, and European and American stock markets generally rebounded on the day strengthen.
However, the sharp drop in Credit Suisse's stock price on Wednesday is undoubtedly equivalent to another blow to the market recovering from a serious illness, causing the entire financial market to fall into a more serious panic than last Thursday to this Monday.
Although, regarding this dangerous situation, the CEO of Credit Suisse responded before the U.S. stock market, saying that "we are a strong bank that exceeds all regulatory standards." In addition, he said the deficiencies in previous financial reports referred to financial reporting controls and had no impact on performance. He also reiterated that Credit Suisse has nothing to do with the state of the U.S. banking sector (Silicon Valley Bank bankruptcy).
However, the market did not buy it. The share price of Credit Suisse Bank continued to decline after the opening bell, and has now fallen by nearly 30%.
At present, the market is completely dominated by safe-haven trading. The difference from last Thursday to this Monday is that the dollar gold has risen at the same time, and the dollar has now risen by more than 1%. Gold hit a recent high of $1,930 an ounce as risk aversion masked downward pressure from a rising dollar.
As the largest shareholder of Credit Suisse Bank, the chairman of the National Bank of Saudi Arabia ruled out the possibility of providing more financial assistance to Credit Suisse in an interview on Wednesday, which led to a sharp increase in the default risk of Credit Suisse priced in the market, and the stock price fell at an accelerated rate. It had fallen more than 20% before the opening bell.
However, the impact did not stop at Credit Suisse's stock price plunge, but triggered a chain reaction of global financial market turmoil. As the worries caused by the bankruptcy of Silicon Valley Bank in the United States have spread to Europe, the risk of European banking industry has been slowly fermenting in recent days.
Germany's BaFin suspended the business of Silicon Valley Bank's German branch on Monday, but declared that the German subsidiary of Silicon Valley Bank will not pose a threat to the stability of the financial system. The French Finance Minister also came forward to reassure the market on Monday, saying that "there is no specific risk of contagion from the Silicon Valley Bank (SVB) incident, and the French banking industry is stable."
As the Federal Reserve and the U.S. Treasury Department took timely measures to deal with the bankruptcy of Silicon Valley Bank, which prevented the panic from intensifying, and the inflation data released by the U.S. showed no surprises, the market sentiment has basically stabilized on Tuesday, and European and American stock markets generally rebounded on the day strengthen.
However, the sharp drop in Credit Suisse's stock price on Wednesday is undoubtedly equivalent to another blow to the market recovering from a serious illness, causing the entire financial market to fall into a more serious panic than last Thursday to this Monday.
Although, regarding this dangerous situation, the CEO of Credit Suisse responded before the U.S. stock market, saying that "we are a strong bank that exceeds all regulatory standards." In addition, he said the deficiencies in previous financial reports referred to financial reporting controls and had no impact on performance. He also reiterated that Credit Suisse has nothing to do with the state of the U.S. banking sector (Silicon Valley Bank bankruptcy).
However, the market did not buy it. The share price of Credit Suisse Bank continued to decline after the opening bell, and has now fallen by nearly 30%.
At present, the market is completely dominated by safe-haven trading. The difference from last Thursday to this Monday is that the dollar gold has risen at the same time, and the dollar has now risen by more than 1%. Gold hit a recent high of $1,930 an ounce as risk aversion masked downward pressure from a rising dollar.
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