The prediction of Credit Suisse and Deutsche Bank nearing collapse follows hot on the heels of the crypto market downturn. Just when everybody thought the current market conditions couldn’t get any shakier, news of these two big banks on the verge of collapse fuelled fear among investors and traders.
The Twitter community seems distressed as Credit Suisse and Deutsche Bank have about 2.7 trillion in assets under management between them. The figures suggest that a lot of investors and traders are exposed to a long ugly recession if the rumors turn out to be true.
Experts also warned that global debt levels can still drag down stocks and the persistent inflation can further take a toll on the financial system. While the crypto market has been witnessing falling prices, the banks also took the hardest hits.
This time around, private equity, hedge funds, credit funds, and even crypto assets’ dip in prices has spared no investor immune to the extreme volatile conditions.
Well, the prediction of these two banks collapsing could only be havoc yet the fear of getting caught in a nasty recession is definitely circulating amid such a hostile market scenario.
Moreover, the Deutsche Bank is no stranger to crypto as last year the bank purchased a majority share in Swiss fintech startup Crypto Finance AG. This makes it more prone to risk. Even one of the Twitter users said that the only thing that could save Credit Suisse is if it rebranded to Credit Suisse Inu.
Another user pointed out that the reason why Credit Suisse and Deutsche Bank are getting hammered is that they are associated with a very weak and cyclically exposed sector (European banks). Consequently, they suffer from additional idiosyncratic weaknesses.
The user also emphasized that a non-emotional, data-driven assessment of the situation hardly calls for a widespread collapse.
The Twitter community is highly skeptical whether the conditions are as severe as rumored or if the shallow predictions are being spread across investors. However, much volatility is expected and irrespective of collapse the market is still tight with fear looming around the corner.
