👉 Background: After the collapse of Silicon Valley Bank last week, fears have been spreading over the stability of the entire global banking sector.

👉 What happened: On Wednesday last week, Credit Suisse shares crashed by as much as 30 per cent and there were a couple of reasons behind the drop:

• Credit Suisse said it had found "material weaknesses" in its own financial reporting.
• Its largest shareholder, Saudi National Bank, said it could not provide further support to the bank by buying more of its shares.

👉 What else: On Friday, Credit Suisse was valued at 7.4 billion francs ($11.9 billion). By the end of the weekend, UBS had acquired Credit Suisse for just 3 billion francs (~$4.8 billion AUD).

What's the key learning?

💡Investor sentiment has changed for all banks and now investors as well as customers are scrutinising all banks much more carefully.

💡Last year, financial markets were worried about whether Credit Suisse was going to be able to fund itself and pay its debts. On top of this, Credit Suisse has been more scandalous than an episode of Real Housewives - we're talking allegations of:

• Tax evasion
• Money laundering,
• Lost funds in the collapse of Australia-founded Greensill Capital andArchegos

💡 Its customers, who are largely wealthy clients and businesses, have been steadily taking their money out of the bank. So, with this problem together with Saudi investors capping out on investment, it means the global financial market is spooked.

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