Concerns surrounding the possibility that the U.S. banking crisis could end up sparking issues around the globe were seemingly realized as of this past Tuesday morning due to Credit Suisse, a global lending titan, recently having its shares drastically drop due to the news of a delayed annual report finding “material weaknesses” in its balance sheet for the past two years.
All shares for the international financial titan based out of Zurich ended up dropping in value by close to 5% to an all-time low when it comes to pre-market trading in the wake of a report being released on Tuesday that acknowledged its biggest annual loss since back during the financial crisis of 2008 and stated that large scale customer withdrawals were climbing starting back in the fourth quarter of last year. Bank stocks have been taking massive hits since the collapse of Silicon Valley Bank last week and the much smaller New York-based Signature Bank.
“My prediction, I called Lehman Brothers years ago, and I think the next bank to go is Credit Suisse because the bond market is crashing,” expressed the author of the best-selling book “Rich Dad, Poor Dad,” investor Robert Kiyosaki, to Fox Business Network this past Monday evening.
The collapse of an institution as fundamental as Credit Suisse, which holds the title of the world’s eighth-largest investment bank while being a provider of a large range of various private banking services, would be devastating.
As part of its annual report, the group indicated that its internal and disclosure controls over financial reporting as of December 31, 2022 and 2021 had not been effective. The report came due last week, but ended up being delayed in the wake of last-minute talks with the Securities and Exchange Commission about its disclosures when it comes to cash flow.
Credit Suisse Crashes To All Time Low After Boosting Deposit Rates To Reverse Bank Run https://t.co/mSEd50Ci2J
— zerohedge (@zerohedge) March 2, 2023
“The material weaknesses that have been identified relate to the failure to design and maintain an effective risk assessment process to identify and analyze the risk of material misstatements in its financial statements and the failure to design and maintain effective monitoring activities,” explained the bank in a release.
Although the bank claimed that withdrawals have petered out since it raised interest rates for its deposits, the statement ended up scaring a large number of investors and could spark a run on deposits that would be similar to the one that ended up being the demise of Silicon Valley Bank. Despite this, Credit Suisse’s issues started quite a bit before the current banking issues. The stock price for the company had fallen out by well over 80% since March 2021.
