Stock markets across Asia fell this morning as troubles at international banking giant Credit Suisse intensified fears of a wider bank crisis.
Major indexes in Japan, Hong Kong and Australia fell by more than 1% amid heavier losses in bank shares.
This comes as Credit Suisse said it would borrow up to £44.5billion to shore up its finances.
Shares in the bank plunged after it found "weakness" in its financial reporting.
The BBC understands that the Bank of England has been in touch with Credit Suisse and the Swiss authorities to monitor the situation.
Problems in the banking sector surfaced in the US last week with the collapse of Silicon Valley Bank, the country's 16th-largest bank, followed two days later by the collapse of Signature Bank.
Smaller banks
Developments at Credit Suisse were "amplified" by problems at the smaller banks, said Sayuri Shirai, an economics professor at the Keio University in Tokyo.
"Investors and creditors are concerned about risk. Banks may suffer from raising funds, which in turn will affect the cost of funding for SMEs and start-ups globally," she added.
Japan's Nikkei 225 index fell by 1.1% at mid-day Asian trading
Shares in Mitsubishi UFJ Financial Group, the country's largest lender by assets, were down by 3%. This was in line with losses at counterparts Sumitomo Mitsui Financial Group and Mizuho Financial Group.
Indexes in Hong Kong and Sydney fell by over 1.5%, while the Shanghai Composite was 0.5% lower.
"Markets could return to normal quickly once the US-centric episode fades to the back burner. Broader contagion fears at this stage are limited as banks are so much better capitalised in Asia," said Stephen Innes, managing partner at SPI Asset Management.
Scandals
Credit Suisse, founded in 1856, has faced a string of scandals in recent years, including money-laundering charges and other issues.
It lost money in 2021 and again in 2022 and has warned it does not expect to be profitable until 2024.
The demise of Silicon Valley Bank has also fuelled concerns about the value of bonds held by banks, as rising interest rates made those bonds less valuable.
Central banks around the world - including the US Federal Reserve and the Bank of England - have sharply increased interest rates as they try to curb inflation.
Banks tend to hold large portfolios of bonds and, as a result ,are sitting on significant potential losses. The falls in the value of bonds held by banks is not necessarily a problem unless they are forced to sell them.
Silicon Valley Bank - which specialised in lending to technology companies - was shut down on Friday by US regulators in what was the largest failure of a US bank since 2008.
FTSE 100
The UK's top share index, the FTSE 100, was up 94 points at 7,439 shortly after opening this morning, following yesterday's 292-point loss due to global bank fears.
Brent crude futures were 0.33% higher at $73.93 a barrel.
Companies reporting today
- Full-year results: Rentokil Initial, Savills