Following Credit Suisse securing £45 billion financing agreement, European stock markets rose at the opening of trading on Thursday.
The UK, France, and German stock markets all recovered, and the share price of Credit Suisse increased by 40%.
Credit Suisse announced overnight that it would draw up to 50 billion Swiss francs (£44.5 billion) from the country’s central bank to strengthen its finances.
Stock markets crashed on Wednesday due to concerns that Credit Suisse’s problems could spark a larger banking catastrophe.
The major stock market indices in London, Frankfurt, and Paris all started the day stronger by as much as 1.7%.
After disclosing that it had discovered “material weaknesses” in its financial filing, Credit Suisse had requested assistance from the Swiss National Bank.
It caused fear among other investors when the bank’s largest shareholder, Saudi National Bank, announced that it would stop purchasing new shares in the company.
Credit Suisse has the necessary funds, according to Switzerland’s central bank, but it was emphasized that assistance would be available if necessary.
According to the BBC, Credit Suisse and Swiss authorities have been in contact with the Bank of England to keep an eye on the issue.
The shocking failure of Silicon Valley Bank, the 16th-largest lender in the US, and the failure of New York’s Signature Bank two days later revealed problems in the banking industry in the US last week.
‘Material weaknesses’
Credit Suisse, founded in 1856, has faced a string of scandals in recent years, including money laundering charges, spying allegations, and high-profile departures.
It lost money in 2021 and again in 2022 and has warned it does not expect to be profitable until next year.
The bank’s disclosure on Tuesday of issues in its financial reporting renewed investor concerns.
