Credit Suisse shares on Monday reached a new record low, falling as much as 15% as investors continued to hammer away at the stock of the Swiss banking giant after the collapse of banks in the U.S.
While SVB Financial and Signature Bank collapsed in the wake of the downturn in the technology and crypto sectors as interest rates rise, Credit Suisse’s difficulties have been of its own making.
Credit Suisse CSGN,
According to FactSet, Credit Suisse shares trade at 0.2 estimated 2023 tangible book value. Rival UBS UBS,
Credit Suisse was not the only European bank to see its shares slide: Commerzbank CBK,
Analysts at Morgan Stanley say they don’t expect eurozone banks to be forced into selling their bonds, the way SVB had to, owing to hedging programs in place. They also say increased deposit competition will be gradual. “A higher liquidity starting point and lower loan growth explains why deposit competition is lower in Europe,” the analysts say.
The Fed and other central banks face a difficult choice: Keep rates high to control inflation or loosen monetary policy to stabilize financial markets.
Steven Goldstein is based in London and responsible for MarketWatch’s coverage of financial markets in Europe, with a particular focus on global macro and commodities. Previously, he was Washington bureau chief, directing MarketWatch’s economic, political and regulatory coverage. Follow Steve on Twitter: @MKTWgoldstein.
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