CNBC Daily Open: Credit Suisse brings the banking crisis to Europe

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The banking situation spreads to Europe.

The banking turmoil successful the U.S. — which appeared to beryllium contained conscionable yesterday — dispersed to Europe connected Wednesday successful the signifier of Credit Suisse.

It's important, however, to enactment that Credit Suisse's troubles are unrelated to reasons down SVB's implosion. On Tuesday, Credit Suisse acknowledged "material weakness" successful its fiscal reporting processes for 2022 and 2021. But the Swiss bank's problems truly began successful 2020 with a spying scandal, followed by a nonaccomplishment of billions (and credibility) successful the 2021 Archegos hedge money ungraded — which yet led to a melodramatic restructuring precocious past year.

Though unrelated, the operation of banking crises successful the U.S. and Europe could marque wealth overmuch harder to travel by, according to Peter Boockvar of Bleakley Financial Group. Banks, Boockvar said connected CNBC's "Squawk Box," are going to "focus much connected firming up equilibrium sheets" than connected lending.

And a slowdown successful lending would chopped into request and superior investment, which, successful turn, could marque a recession get sooner. Indeed, yesterday, enslaved yields, lipid and markets each fell. "What you're truly seeing is simply a important tightening of fiscal conditions. What the markets are saying is this increases risks of a recession," said Jim Caron, caput of macro strategy for planetary fixed income astatine Morgan Stanley Investment Management. Echoing that view, Goldman Sachs connected Wednesday lowered its maturation forecast for the U.S. by 0.3 percent points to 1.2%.

That script is not each that surprising. Tightening fiscal conditions and a slowdown successful the system are precisely what the Federal Reserve is hoping to technologist done its involvement complaint hikes. The renewed volatility successful the banking assemblage — on with a driblet successful February's wholesale prices and retail sales — has accrued the chance, then, that the Fed mightiness clasp the enactment astatine its adjacent meeting. It's a communal saying that involvement rates enactment astatine a lag — archetypal gradually, past suddenly. We mightiness beryllium seeing the effects present of accelerated complaint hikes from past year.

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