European bank shares drop after Credit Suisse bailout
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European bank shares are proving volatile as investors remain concerned about wider problems in the industry.
Major falls were seen in early trading in Germany's Deutsche Bank and France's BNP Paribas, although shares in both have since recovered some losses, the BBC reported.
BNP is still down about 5 per cent and Deutsche Bank 6 per cent.
In the UK, shares in Standard Chartered, HSBC and Barclays also took an early hit.
UBS, which was responsible for buying out its troubled Swiss rival in a $3 billion deal, has seen its own shares fall by around 13%. Shares of Credit Suisse have dived more than 60 per cent after UBS agreed to buy the bank over the weekend.
It's worth pointing out analysts had expected a significant drop. Sunday's last-minute deal valued Credit Suisse at just over $3.15 billion, which was a fraction of its $8 billion price tag on Friday, the BBC reported.
Share prices in Asia fell earlier -- with Hong Kong's Hang Seng index dropping by about 3 per cent and the Nikkei in Tokyo more than 1 per cent down, the BBC reported.
Credit Suisse was the most significant failure of a crisis of confidence in the banking sector that also saw the collapse of Silicon Valley Bank in the US.
Switzerland's second biggest lender was seen as a bank that was too important to fail -- meaning the takeover was rushed through by the the country's authorities.
Central banks around the world have been raising interest rates in an attempt to ease inflation.
This rise in rates has hit the value of even safe investments that banks keep some of their money in. This in turn has impacted investor confidence, and bank share prices.
Against this background, two mid-sized US banks focussed on the tech sector -- Silicon Valley Bank and Signature Bank -- collapsed earlier this month, the BBC reported
