Already jittery investors have been in panic mode since the collapse of two regional US banks over the weekend sparked a sell-off across equities and ramped up concerns of a global recession.

While commentators have said the crisis should be contained and most major lenders had little exposure to the firms – Silicon Valley Bank and Signature Bank – news of trouble at Credit Suisse once again sent traders running for the hills.

Switzerland’s second-biggest bank tanked nearly 25 percent after Saudi National Bank – its main shareholder – said it would “absolutely not” up its stake in the firm.

That came a day after its annual report cited “material weaknesses” in internal controls at the firm, which has been hit by a series of scandals in recent years.

The Swiss central bank insisted that capital and liquidity levels at the lender were adequate, but stressed it was ready to make liquidity available to Credit Suisse.

Credit Suisse later announced it would borrow nearly $54 billion to “support” the group.

The developments sent shivers through markets as memories of the global financial crisis came flooding back.

Bank shares were hammered, with Britain’s Barclays, Germany’s Commerzbank and Wall Street titan JP Morgan diving around five percent.

Embattled midsized lender First Republic Bank collapsed more than 20 percent in New York and it has now lost more than 70 percent over the past week.

Markets in London, Paris and Frankfurt lost more than three percent. The fear spread to Asia, where Japan’s Sumitomo Mitsui Financial and Mitsubishi UFJ Financial shed more than four percent apiece, while South Korea’s Hana Financial Group gave up nearly three percent and HSBC dropped more than two percent.

Broader markets were also in the red.

Hong Kong gave up more than two percent, while Tokyo, Sydney, Shanghai, Seoul, Singapore, Wellington, Taipei, Manila and Jakarta were also well down.

“Fear has once again gripped the markets, concerned about a repeat of past crises – one in particular, for obvious reasons – and the implications for the financial system and the global economy,” said OANDA’s Craig Erlam.

“Of course, this is natural when so little is known about the situation and what it ultimately means for the health of the rest of the system.

“In the absence of facts, everyone is left with little choice but to speculate and frankly, what little commentary we’ve had hasn’t really helped. Quite the opposite, in fact.”

Crude at 15-month low

The crisis has compounded problems for investors, who were already in a downbeat mood as they contemplated more Federal Reserve interest rate hikes to rein in stubbornly high inflation.

There is now much debate about whether the bank will continue with its tightening campaign as the collapse of SVB has been widely linked to the sharp rise in borrowing costs over the past year.

Some commentators expect officials to lift rates once more next week but possibly hold afterwards, while there is a growing belief that it could even announce cuts before the end of the year.

And now there is talk of the European Central Bank also calling a halt to its hiking campaign, despite inflation remaining elevated.

There was a little good news, however, from data showing US wholesale prices fell on-month in February, confounding expectations for a rise and raising hopes that could filter through to consumer prices.

Still, there remains a lot of uncertainty among investors, who are increasingly worried about a global recession.

“Markets could get messy amid the fallout from Silicon Valley Bank’s collapse, alongside ongoing uncertainty over the future path of the global economy and interest rates,” Marty Dropkin of Fidelity International said.

“The global equity rally since the beginning of the year has faded after a bruising pullback last month with persistently sticky inflation and hot labour markets forcing market participants to change their outlook on the path of interest rates.”

The prospect of a downturn has battered oil prices as traders worry about the impact on demand. Both main contracts edged up slightly Thursday but that came a day after they tanked around five percent.

The commodity remains wallowing around 15-month lows.

“We seem to be walking on thin ice right now, with the fragile risk environment still trying to stabilize from the SVB fallout,” Yeap Jun Rong at IG Asia said.

“There seems to be a lack of bullish catalysts for oil prices to tap for now.”