In the first hour and a half of trading this morning credit Suisse shares have plunged by more than 60% to an all-time low of 73 cents down from €1.86 at the close of business Friday.
The contagion that shook US banks in the wake of the collapse of Silicon Valley Bank little more than a week ago has spread to Europe.
Deutsche bank is down 7.5% this morning, Bank of Ireland 3.86%, Allied Irish Bank 2.65% and UBS who announced a takeover of Credit Suisse yesterday evening is down 8.8% in the first hour and a half of trading.
It appears that the hopes for financial stability following UBS agreement to buy Credit Suisse for €3 billion following a frantic weekend of negotiations brokered by Swiss regulators are now being dashed as the markets respond negatively to this development.
It appears to the ordinary person not well versed in the intricacies of financial markets that we are looking at an unprecedented banking crisis. However, we will not be told that in order to prevent a run on the banks as people get nervous about the security of their deposits and rush to withdraw their money.
Just under two weeks during the Dáil debate tabled by the Rural Independent Group Minister Ossian Smyth said: “if we got rid of cash people would stop believing in money. Cash is tangible and there is something there that one can see because the entire financial system is based on faith and belief. The reason we accept pieces of paper or metal discs in exchange for our labour is because we have faith that somebody else is going to accept those in turn. Second, we have faith that is not going to be devalued by the Central Bank printing too much of it. Perhaps it is harder to maintain that faith if everything is happening in a electronic world.”
It appears that faith and belief in the financial markets is imploding and today will be seen as a watershed moment when the history of our time is recorded.