Shares of financial services firm and bank Credit Suisse plunged over 20 per cent – falling for an eighth consecutive session – on the Swiss stock exchange Wednesday amid concerns after its top shareholder, Saudi National Bank (SNB), ruled out more investment and short-term debt approached distress levels.

According to a Reuters report, the SNB said it would not buy any more shares due to a ‘regulatory issue’.

‘We cannot because we would go above 10 per cent… all new rules kick in whether it be by our regulator or the Swiss regulator or the European regulator. We’re not included to get into a new regulatory regime,’ SNB chairman Ammar Al Khudairy reportedly said.

SNB holds a 9.88% stake in Credit Suisse and has an investment commitment of $1.5 billion.

The stock slump renewed a broader sell-off among European lenders, which were already facing significant market turmoil as a result of the Silicon Valley Bank collapse. This included France’s Societe Generale, Spain’s Banco de Sabadell and Germany’s Commerzbank.

Main indices in Paris and Milan fell by over three per cent and those in London and Frankfurt by around 2.5 per cent.

Amid fear of contagion from the SVB crisis, European bank stocks came under pressure again as regulators and financial executives scramble to gain investor confidence.

Concerns about an impending recession due to increasing inflation and hiking of interest rates persist, as smaller businesses find it difficult to repay loans and losses pile up for lenders.

US regulations are tighter since the 2008 recession, with calls to further tighten the screws on mid-tier entreprises like SVB and Signature Bank, even as US President Joe Biden vows action.

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