March 15 (UPI) — Swiss bank lender Credit Suisse’s stock plummeted Wednesday, dragging down European markets after the chairman of the Saudi National Bank said publicly that it would not increase its support.
Shares of Credit Suisse fell more than 20%, triggering temporary halts in trading on bank stocks as the European Stoxx fell 2.6% amid the banking woes.
Shares of Societe Generale dropped 11.9%, BNP Paribas fell 10.7%, Commerzbank dipped 8.9% and Deutsche Bank declined 7.8% on Wednesday.
U.S. stocks were also on the decline with the Dow Jones Industrial Average down 557.77 points, or 1.73%, in early trading.
The Credit Suisse stock free-fall came after Saudi National Bank Chairman Ammar Al Khudairy said in an interview with Bloomberg TV on Wednesday that it could not increase its holding because of banking rules.
“The answer is absolutely not, for many reasons outside the simplest reason, which is regulatory and statutory,” Khudairy told Bloomberg. “We’re not inclined to get into a new regulatory regime.”
Credit Suisse Chairman Axel Lehmann said at a panel session in the Saudi capital of Riyadh that the bank was working on “de-risking” its balance sheet.
“We are regulated, we have strong capital ratios, very strong balance sheet,” he said, according to CNBC. “We are all hands on deck.”
Wednesday’s decline came after Credit Suisse stock fell to an all-time low of $2.47 midday on Tuesday before closing down 1.18% at $2.51 as it described a “material weakness” in its financial reporting that could result in “misstatements of account balances or disclosures.”
The bank made the statement in the release of its 2022 annual report.
The bank said that in late 2022 it saw “significantly higher withdrawals of cash deposits, non-renewal of maturing time deposits and net asset outflows at levels that substantially exceeded the rates incurred in the third quarter of 2022.”
The news comes a day after Moody’s Investors Service downgraded its rating of the American banking system as a whole, from stable to negative, citing the decline of the current banking environment after the failure of three banks.
The Federal Reserve Board is reviewing the failure of Silicon Valley Bank, Silvergate Bank and Signature Bank after a run on deposits.
The U.S. Treasury Department has moved to ensure depositors will be able to access their money and President Joe Biden has sought to ensure Americans that “the banking system is safe.”