Credit Suisse shed nearly a quarter of its value on Wednesday, falling to a new all-time low amid fears of a global banking crisis after the Silicon Valley Bank (SVB) collapse last week.
Shares in the ailing Swiss bank fell about 24 percent on Wednesday after hitting a record low on Monday.
Trading in Credit Suisse shares halted on Wednesday morning UK time. By midday, the stock recovered slightly, but was still down more than 20 percent.
The drop came after Credit Suisse’s biggest investor, the Saudi National Bank, said it had ruled out giving the bank – Switzerland’s second-largest – more financial support.
“We can’t because we would go over 10 percent. It’s a regulatory question,” SNB Chairman Ammar Al Khudairy told Reuters on Wednesday.
The Saudi National Bank took a 10 percent stake in Credit Suisse last year as the Swiss bank tried to recover from a series of scandals that had eroded investor and customer confidence.
Al Khudairy said Wednesday his bank is happy with Credit Suisse’s transformation plan and thinks it needs additional money. He said his bank would exit when the fair value of the shares was reached.
It comes as the consequences of the seizure of two US financial institutions continue.
The SVB, a contact point for tech entrepreneurs, collapsed on Friday after a bank run. Two days later, regulators announced that New York-based Signature Bank had also failed and would be impounded.
This week Robert Kiyosaki, a finance guru and bestselling author Rich dad, poor dad predicted that Credit Suisse would be the next bank to collapse.
President Joe Biden and regulators have tried to reassure the public that risks are limited and deposits at other banks are safe.
The Federal Reserve, the US Treasury Department and the Federal Deposit Insurance Corporation said the federal government will protect all deposits with SVB and Signature Bank, including those that exceed the FDIC’s $250,000 limit.
The Fed also initiated a major emergency lending program to boost confidence in the country’s financial system.
And its chairman, Jerome Powell, on Monday announced a review of its oversight of SVB to understand how it could have better managed its regulation of the bank.
Speaking at the White House on Monday, Biden said, “Thanks to my administration’s quick action over the past few days, Americans can have confidence that the banking system is safe. Your insoles will be there when you need them.”
Biden and lawmakers are also calling for tough financial regulations, with some criticizing the 2018 repeal of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which tightened banking regulation in 2010.