Credit Suisse and First Republic are the latest banks in peril. What’s happening?

Credit Suisse and First Republic Bank are now in the spotlight after the collapse of Silicon Valley Bank. Why is risk spreading to bank after bank?

A number of banks around the world are facing significant stock hits amid a crisis of confidence spreading from the collapse of Silicon Valley Bank.

Credit Suisse’s share price has whipsawed this week as fears about the Swiss bank’s future were swiftly met with an offer of liquidity from Switzerland’s central bank.

In a similar case on Thursday, First Republic Bank in the U.S. was extended a loan amid growing fears it would join SVB and New York-based Signature Bank in going under.

Financial officials across the world are moving in lock-step to reassure consumers that the global banking environment is secure, as experts say that fear, if left unchecked, could be “catastrophic” for the financial system.

Here’s what to know.

Credit Suisse sought to shore up its liquidity and restore investor confidence on Thursday by borrowing up to US$54 billion from Switzerland’s central bank, marking the first major international bank to be thrown a lifeline since the 2008 financial crisis.

Credit Suisse, one of Switzerland’s largest banks, has already been in the spotlight over recent months amid a string of losses and management failures. But that scrutiny intensified this week when its largest shareholder, the Saudi National Bank, said it would not buy up more of the Swiss bank’s shares.

That sent Credit Suisse’s stock cratering by as much as 30 per cent this week, hitting a new low. The stock price recovered somewhat amid news it would accept the credit offer from the central bank.