Will Credit Suisse Trigger A New Crisis In Europe?

The crisis at Credit Suisse and Deutsche Bank left its mark on money markets in the first week of the new year. The share prices of Credit Suisse and Deutsche Bank, which together manage $1.5 trillion in assets, fell. In 2022, the decline in stock value reached 60 percent. These changes in the markets raised the question of whether there was a new banking crisis in Europe.

The Process Began With The Energy Crisis

After the sanctions imposed by European countries in response to Russia’s invasion of Ukraine, European countries struggling with the energy crisis are facing a new disaster. When world stock markets plunged in 2022 in response to aggressive interest rate cuts by central banks, a new dispute erupted the following week between Credit Suisse and Deutsche Bank. As shares of Swiss investment bank Credit Suisse and German investment bank Deutsche Bank fell, there was talk of the possibility of a second Lehman Brothers crisis.

Shares Fell By Half

The share price of Credit Suisse, which manages $1.5 trillion in assets, fell from $14.90 in February 2021 to $3.50 in October 2021, and the 14-year CDS hit its highest level since 2008 in September 2022, when Lehman Brothers collapsed.

Deutsche Bank shares also fell from their post-crisis high of 45 euros in 2008 to 7.65 euros. This morning, the share price fell 9 percent. This shows that losses for 2022 have reached 60 percent.

Will Credit Suisse Trigger A New Crisis In Europe?

Item On The Agenda Of The Fed Meetıng

While Credit Suisse CEO Ulrich Koerner warned that the bank is in a very dangerous situation, some market observers claim to have learned from reliable sources that one of Europe’s leading investment banks is in serious trouble. Koerner said the balance sheet of the bank, which is preparing for restructuring, is in good shape.

Both banks are systemically important financial institutions (SIFIs), sometimes referred to as “too big to fail.” The situation of European banks, which many observers link to the collapse of Lehman Brothers, the symbol of the 2009 financial crisis, is expected to be one of the main topics at the Oct. 3 meeting of Fed officials.

Although there is a widespread belief that a serious crisis is imminent, it is too early to make a clear judgment. It would be best to watch this process for a while and then decide what steps to take.

Ana Costa

I am resourceful and passionate about taking on whatever task lies ahead of me. I thrive in workplaces that promote diversity and inclusivity, whether it is working in journalism or being in the first place of global progressive social movements. I'm a journalist with a keen interest in reporting on daily global economic, finance, and crypto news. I have a deep understanding of how financial markets and global economies work, and I'm passionate about covering the latest developments in the world of cryptocurrency. I believe that the intersection of finance and technology is where the most exciting stories can be found, and I'm committed to staying up-to-date with the latest trends and emerging technologies in these areas. With years of experience in reporting and a strong network of sources, I strive to provide my readers with insightful and accurate coverage of the topics that matter most. Whether it's a breaking news story, an in-depth analysis of market trends, or an interview with a leading industry expert, I'm always ready to tackle the next big story and deliver it to my audience in a clear and engaging way. I focus on social media marketing, digital marketing, and market research. My strengths lie in creative marketing plans, collaboration with team members, and an eye for rising trends in different target markets.

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