Fears of another 2008-style banking crisis have resurfaced this week after Credit Suisse got a £45bn emergency loan from Switzerland's central bank while US authorities have stepped in to broker a £24.7bn rescue package for First Republic.
Stock markets have been jittery amid worries that isolated failures could widen to affect the global banking system, reviving bad memories of the financial crisis that plunged many Western economies into recession in 2008-09.
The news comes after the collapse last week of Silicon Valley Bank, the second-biggest bank failure in US history. Shares in San Francisco-based First Republic plummeted yesterday as customers began withdrawing their money fearing it could be the next to fail, but stocks recovered as reports of the rescue package surfaced.
A joint statement from US federal financial authorities said 11 banks have agreed to pump billions into the lender to stabilise it. The Bank of England is said to have been in talks with its global counterparts over the crisis, and was reportedly in touch with both Credit Suisse and the Swiss National Bank regarding the emergency loan.
But markets were steadying yesterday night amid hopes that the lifelines will limit any "contagion".
What's happening at Credit Suisse?
The lender has been struggling for many months, but this week sought help from the Swiss government after revealing it had found "material weakness" in its financial situation.
This story is from the March 17, 2023 edition of The Independent.
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This story is from the March 17, 2023 edition of The Independent.
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