Banking Crisis Worsens: Swiss Bank is First “Too Big to Fail” Bank to be Bailed Out as Saudis Withdraw Support
Switzerland's second largest bank, Credit Suisse, which has been experiencing bank runs and plummeting stock valuations since the end of 2022, became the first SIFI (systemically important financial institution), or "too big to fail" bank, to crash today forcing regulators to step in and ensure a bailout. The Saudis almost single-handedly crashed the U.S. Stock Market (and stock markets around the world) this morning when they announced that they were not going to put any more money into the failed Swiss bank. While the U.S. Stock Market did end lower today, it most assuredly would have been a blood bath if Swiss Regulators had not stepped in to ensure the world that it was going to bail out their troubled bank. This was after European markets had closed, however, and European banks' stock values lost 7% at end of trading in Europe today. Since a simple statement made by Saudi National Bank Chairman Ammar Al Khudairy almost crashed the entire world's financial system today, what does that tell you about the frailty of the current banking system?