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Dow futures fall 500 points as Credit Suisse shares drop more than 20%

Sven
edited March 2023 in Other Investing
Apparently something broke in the banking sector not just in US…

Excerpt from article:
In recent days, a crisis in the financial sector has centered around regional banks as Silicon Valley Bank and Signature Bank collapsed, both casualties of poor management in the face of eight interest rate hikes by the Federal Reserve in the last 12 months. Wednesday morning attention turned to the big banks with shares of Credit Suisse hitting an all-time low.

Saudi National Bank, Credit Suisse’s largest investor, said Wednesday it could not provide any more funding, according to a Reuters report. This comes after the Swiss lender said Tuesday it had found “certain material weaknesses in our internal control over financial reporting” for the years 2021 and 2022.

As Credit Suisse dragged down the European Bank sector, U.S. big bank shares declined in sympathy. Citigroup and Wells Fargo shed 3%, while Goldman Sachs and Bank of America fell 2%. The Financial Select Sector SPDR Fund lost 2.9% in premarket trading, giving up its 2% pop on Tuesday.

Regional Banks, whose rebounded helped lift sentiment for the broader market on Tuesday, fell back into the red again. The SPDR S&P Regional Banking ETF (KRE) was down 3% in the premarket, led by losses in Old National Bancorp, Zions Bancorp and Fifth Third Bancorp. To be sure, shares of First Republic Bank were clinging to gains.
https://cnbc.com/2023/03/14/stock-market-today-live-updates.html

From Reuters:
Credit Suisse on Tuesday published its annual report for 2022 saying the bank had identified "material weaknesses" in controls over financial reporting and not yet stemmed customer outflows.

Switzerland's second-biggest bank is seeking to recover from a string of scandals that have undermined the confidence of investors and clients. Customer outflows in the fourth quarter rose to more than 110 billion Swiss francs ($120 billion).

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