Credit Suisse’s difficulties cause European stock markets to panic

The respite was short-lived in European financial markets. Five days after the bankruptcy of Silicon Valley Bank and several small American establishments, some French banks experienced a historic loosening on Wednesday. Shares of BNP Paribas and Société Générale lost 11% in value, weighed down in particular by fears surrounding Credit Suisse.

It all started with a statement Tuesday from the Saudi National Bank, the largest shareholder in this Swiss bank, the second in the country. This Saudi establishment has indeed indicated that it would not increase its support for Credit Suisse in the event of difficulties. However, this bank has been in a delicate situation for a long time. In the space of a year, the value of its share has been divided by four. “It’s a bank that has structurally had organizational and risk management problems for five or six years,” confirms Éric Pichet, professor at Kedge Business School.

Little risk of spread

24 hours after the declaration of its main shareholder, Credit Suisse saw its share collapse by 25% on the stock market, dragging in its wake many European banks. But according to Éric Pichet, the risk of spread is quite low. “When we look at the market capitalization of Credit Suisse, I think we are at around 7 billion euros. The market capitalization of UBS (a Swiss wealth management bank Editor’s note) is almost ten times more. We are up to 60 billion euros. I do not think that Credit Suisse, at the current stage, can trigger systemic risk.