The turmoil prompted an automatic pause in trading of Credit Suisse's shares on the Swiss market and sent shares of other European banks plunging by as much as double digits.
The turmoil fanned new fears about the health of financial institutions following the collapse of two U.S. lenders in recent days.
Credit Suisse stock dropped more than 27%, to about 1.6 Swiss francs , in mid-afternoon trading on the SIX stock exchange Wednesday. That’s down more than 85% from February 2021. The shares have suffered a long, sustained decline: In 2007, they were trading at more than 80 francs each. The STOXX Banks index of 21 leading European lenders sagged 8.4% following relative calm in the markets Tuesday.
The Swiss bank was pushing to raise funding from investors and roll out a new strategy to overcome an array of troubles, including bad bets on hedge funds, repeated shake-ups of its top management and a spying scandal involving Zurich rival UBS. A day earlier, Credit Suisse reported that managers had identified “material weaknesses” in the bank’s internal controls on financial reporting as of the end of last year. That fanned new doubts about the bank’s ability to weather the recent storm.
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