Despite bold proclamations about a return to stability, the sale of Credit Suisse to UBS does not appear to have laid to rest contagion concerns.
Smead also said investors could expect higher returns on assets from the new UBS-Credit Suisse entity, along with more consolidation in the European banking sector.
"This solves what I think is probably an idiosyncratic problem at Credit Suisse, but I'm not sure it's a firebreak big enough to stop the rot for the market," he said Monday. Although he added that the rest of the European banking system is "much more robust" than it was." Sym suggested that if European bank shares fall significantly as a result of the deal, he might "start to nibble" at some stocks, potentially even UBS.
"One issue is that the reported price of $3.25bn equates to ~4% of book value, and about 10% of Credit Suisse's market value at the start of the year," said Neil Shearing, group chief economist at Capital Economics.
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