Relief over Credit Suisse bailout was short-lived as bank shares plummeted on Monday

Bank bonds fell 62% in premarket trade, while UBS Group lost 7.1%


Credit Suisse shares fell 62% on Monday

Bank stocks and bonds Credit Suisse collapsed this Monday, the 20th, after the UBS Group sealed the purchase of the institution in an attempt to restore confidence in a shaken sector. In a package drawn up by Swiss regulators on Sunday the 19th, the UBS group to pay US$ 3.23 billion for the bank 167 years old and will assume up to $5.4 billion in losses. However, after generating relief in the market at first, TheCredit Suisse shares fell 62% in premarket trade to a new lowwhile UBS lost 7.1%. Those sharp moves followed a day of strong selling in Asian financial markets, as investors’ initial optimism about official efforts to contain a banking crisis quickly evaporated. In particular, investor focus shifted to the massive impact that some Credit Suisse bondholders would suffer from the UBS acquisition, which heightened anxiety about other key risks, including contagion, the fragile state of US regional banks and the challenges for central banks as they seek to contain inflation and financial risks.

*With information from Reuters

Source: Jovempan

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