Global Ripple Effects due to the U.S. Bank Failures 2023

By Garvit Vyas , 10 April, 2023

Among one the twenty most valuable European banks, Swiss bank Credit Suisse was one. But it sunk below the rank 146 on the global list of banks with the biggest market capitalizations as it has almost lost 19 percent of its market cap since March 2023. Fellow Swiss lender UBS has taken it over as a lifeline to save the Swiss economy.

Suisse's stock market value was not as low as $3.2 billion, which it was paid for in the takeover. Thus, observers believe that the bank has been sold for a meagre price. According to the reports, the bank was hit hard by the global ripple effects of two U.S. bank failures, Signature Bank and Silicon Valley Bank.

As per the information, the reasons which led to the collapse of the banking system are balance sheet losses, scandals and also the fleeing customers from two years. Also, the customers suffering from the 'stagflation economy' and the rising bank rates caused additional costs, which affected the entire banking system leading to losses ahead of mid-March 2023.

Credit Suisse has become the latest ripple in the industry, becoming a crisis for the banking world. According to the reports, banks around the globe have somewhat lost sizable chunks of their market caps after the bailouts in the U.S. happened. Some reputed banks have not registered such losses since March 11 and March 20, 2023. In Japan, the losses in the three largest banks are between 7.5 percent and 10.5 percent. But the losses are mounting in the banks of the countries like the U.S., Australia, Canada, and several Asian countries.

US Bank Failures Since 2008

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Garvit Vyas

Analyst