Analysts believe Credit Suisse will remain under pressure in the near term, but caution against comparisons to Lehman Brothers.
The Swiss bank’s shares briefly sank to an all-time low this week while credit default swaps hit a record high, as the market’s concerns about the bank’s future became abundantly clear.
As Credit Suisse takes steps to shore up its finances, concerns remain about its exposure to the volatile markets.
The company raised $5.3 billion from strategic investors earlier this year.
Lehman Brothers collapsed in 2008 after becoming embroiled in the subprime mortgage crisis, and analysts believe that Credit Suisse is facing similar challenges.
But some experts believe that Credit Suisse is in a stronger position than Lehman Brothers was, and that it is unlikely to face the same fate.
Credit Suisse’s shares have recovered somewhat from the previous session’s low, but are still down more than 53% on the year.
The bank’s share price is down more than 73% over the past five years, and such a dramatic plunge has led to market speculation about consolidation.
All three major credit ratings agencies — Moody’s, S&P and Fitch — now have a negative outlook on Credit Suisse.
In response, a U.S. investment research company lowered its price target for the stock to 3.50 Swiss francs per share.
