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If you went to bed thinking the banking problems were on their way to being solved and woke up to news that another bank – Credit Suisse, based in Europe – was teetering, it would be natural to worry.
Even White House officials and US economists were breathing sighs of relief Tuesday evening Eastern Time. By Wednesday morning, it felt like things had changed.
Far from regional US institutions like the failed Silicon Valley Bank and Signature Bank, Credit Suisse is among the largest banks in Europe and the world.
The details of Credit Suisse’s problems are as distinct as SVB’s, but the fact remains that a European bank is in trouble on the heels of the US Federal Reserve acting decisively to maintain confidence in the US banking system. The US stock market, along with European markets, were reacting to the anxiety.
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CNN’s Allison Morrow writes that the coincidence is part of the connection.
“They’re facing unrelated problems that happened to take place at the same time, worrying investors about the banking sector,” according to Morrow, who notes that Credit Suisse has been facing problems for years. She points to one investment analyst who wrote that Credit Suisse’s issues have been sucked into the SVB “vortex.”
“Did the SVB mess cause Credit Suisse shares to tank? No,” writes Morrow. “But are European and US banks facing a similar macro environment of suddenly higher interest rates following a decade or more of low (or even negative) rates? Yes.”
It’s also not entirely clear that regional US banks,…
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