Credit Suisse shares drop 30% in bank rout

As much as 30% of Credit Suisse’s shares fell, driving a 7% decline in the European banking index, while the five-year CDS for the company’s flagship Swiss bank reached a new record high, underscoring growing investor concerns.

According to two sources who spoke to Reuters, the European Central Bank (ECB) questioned banks under its supervision about their exposure to Credit Suisse. One of the sources claimed that Credit Suisse’s issues were unique to it and not systemic.

Since March 8, the value of Europe’s bank index has decreased by more than 120 billion euros ($127 billion). French lenders Societe Generale and BNP Paribas were among the worst losers on Wednesday, both falling by 12% and 9%, respectively.

Markets are in chaos. Carlo Franchini, director of institutional clients at Banca Ifigest in Milan, said, “We go from the issues of American banks to those of European banks, first of all Credit Suisse.

Exane’s analysts stated that “some sort of game-changing decisive action” was required to turn the tide and stabilise the situation.

The Financial Times reported that Credit Suisse had asked the Swiss National Bank (SNB) and Swiss financial watchdog Finma for a public display of support. SNC, however, chose not to respond when its largest shareholder claimed that because to legal restrictions, it was unable to give Credit Suisse with additional financial support.

In the US, regional banks also fell, with First Republic Bank down 18%, Western Alliance Bancorp down 7.5% and PacWest Bancorp off around 16%.

Big US banks such as JPMorgan Chase & Co, Citigroup and Bank of America Corp slid by between 1.7% and just over 5%.

BlackRockChief Executive Laurence Fink described the financial situation as the “price of easy money” and said in an annual letter that he expected more US Federal Reserve interest rate increases.