The dollar rose on Wednesday on safe-haven buying after Credit Suisse’s stock tumbled following the disclosure of “weaknesses” in its financial reporting that renewed investor concerns that a full-blown global banking crisis may be brewing.
European currencies fell sharply against the dollar, with Credit Suisse (CSGN.S) shares plummeting 24.2% after its biggest investor, citing regulatory issues about the size of its holding, said it was unable to increase its stake.
Credit Suisse’s 2022 annual report published on Tuesday cited “material weaknesses” in its internal controls over financial reporting, noting that it had not yet stemmed customer outflows.
Concerns about the Swiss bank led the European banking index (.SX7P) to fall 6.9%, its biggest one-day drop in nearly 13 months, and triggered a plunge in European and U.S. bond yields. Investors question whether the Federal Reserve and other central banks can keep hiking interest rates to curb inflation.
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