Second scare of the week: if on Monday it was the Silicon Valley Bank that convulsed the markets, following the decision the previous Friday by the FDIC, the fund that guarantees deposits in the US, to place the financial institution of the Northern California elite in receivership; then, this Wednesday saw the fall of Credit Suisse, after its main shareholder, the Saudi National Bank, made official its decision to stop injecting capital. We are not talking about just any financial institution: Credit Suisse is one of the 20 largest banks in Europe and, although its situation has been anything but prosperous for some time, on this dark day it fell around 30% on the Zurich Stock Exchange although it then rallied a few points to end as showing a 24% fall. Which is equivalent to saying that it has lost practically a quarter of its value.
As happened on Monday - although corrected a little on Tuesday - the European stock markets, all falling more than 3%, entered a situation of collapse and there was a certain panic, with the Ibex falling by 4.37%, second worst on the continent behind Milan, which fell back 4.61%, in the worst day since the year began. Other indicators such as oil also fell by over 6% and in the foreign exchange market the euro also retreated significantly. If on Friday there was concern among financial entities for what might lie ahead, although with a general trend among analysts to calm the restlessness, it is obvious that in recent hours the temperature has risen a notch.
It went so far that we have seen financial institution leaders, such as the chair of France's Societé Générale, one of the main financial services groups in Europe, already openly recommending that the European Central Bank postpone the next interest rate rise, which had been scheduled for this Thursday with speculation on an increase of 50 basis points (00.50%). Lorenzo Bini Smaghi's recommendation to Christine Lagarde was to limit it to 25 points or even wait a month to see how the current situation stabilizes. The ECB does not have an easy position, since if, on the one hand, there is the fear of an interest rate rise, on the other, inflation continues to strain the economy in a very significant way and its fall has been slowed down a little, a situation that obviously doesn't help either.
The news, late this Wednesday evening, that the Swiss National Bank is to provide liquidity to Credit Suisse if needed - which it obviously is - aims to calm the fear existing in the markets that another financial institution will enter the game of roulette that seems to have begun turning in the sector, after apparently breathing with a certain tranquility in recent times. Now some of the uncertainties from the last financial crisis, that of 2008, have returned, and although nothing is exactly the same as then - here, there are no subprime mortgages as there were then - what does maintain a certain similarity is the fear and nervousness itself. All of a sudden, economic news has arisen to a position of priority for ordinary folk, which it doesn't normally possess, and many people have been shaken out of their tranquility and are taking a look at their savings.