Major indexes fell about 1 percent or more on Wednesday, with U.S. banks following their European peers lower as investors became obsessed with the Credit Suisse case.

Bank Credit Suisse activated this Wednesday a relief plan for the crash that its shares are suffering on the stock market. The entity asked the Swiss National Bank for a public show of support after its shares fell as much as 30% in the session after its main Saudi shareholder ruled out increasing its stake.

Since the beginning of the week, almost all major European banks have lost more than 10 percent of their value on the stock market, some even more than 15 percent.

If the measures of the American authorities and the guarantees of the European governments on the health of the banking system after the fall of Silicon Valley Blank (SVB) managed to stabilize markets a bit on Tuesday, the situation remains fragile.

But if Credit Suisse has to deal with “existential problems,” in his view, they are other kinds of difficulties. “It really is too big to fail,” he said.

Unlike SVB, the Swiss establishment is one of thirty international banks considered too big to fail, which also imposes stricter regulations to withstand severe shocks.

Stock Plunge

Asked by Bloomberg TV whether the Saudi bank could invest more money, its chairman, Amar Al Judairy, said: “The answer is absolutely no, for a number of increasingly simple reasons, which are regulatory and legal,” he said.

The Saudis currently own 9.8% of the Swiss bank. “If we go over 10 percent, a number of new rules come into force,” he explained.

The Saudis became CS’s first shareholders during a recapitalization in November launched to finance a major restructuring of the entity.

Swiss law stipulates that natural or legal persons who directly or indirectly hold at least 10% of the capital or voting rights in a bank must provide “a guarantee that their influence is not likely to be detrimental to the prudent and sound management” of the establishment.

The bank has been in trouble for two years after the bankruptcy of British financial firm Greensill, which marked the beginning of a series of scandals that weakened the bank.

Credit Suisse has been in the eye of the hurricane for months and at the end of 2022 had to raise 4,000 million Swiss francs ($4,400 million), a recapitalization that enabled the entry of the Saudi bank.

The losses came as major European banks suffered ugly declines of 8 percent or more, while Switzerland’s Credit Suisse fell nearly 30 percent.

“More and more investors seem to be looking at CS (Credit Suisse) as the next most likely domino to fall,” said Neil Wilson, analyst at Finalt.

Anxiety in New York

JPMorgan Chase fell 4.2%, Citigroup lost 5.7% and beleaguered regional bank First Republic sank 15.0%.

The drop in stocks marks a reversal from Tuesday’s benign session, in which major indexes rose on an apparent easing of concerns about the financial system.

“There are still a lot of question marks about how bad this is going to get,” said Adam Sarhan, an analyst at 50 Park Investments.

“The pressure on Credit Suisse has reached an already very nervous market,” Jane Foley, an analyst at Rabobank, told AFP.

“You see the situation: investors are in a panic. It’s a bloodbath, if you will,” said Fawad Razaqzada, market analyst at City Index and FOREX.com.

“Concerns about another 2008-2009-style financial crisis have grown,” he said.