The riskiest bonds of European lenders are plunging after holders of Credit Suisse Group AG’s contingent convertible securities suffered a historic loss as part of its takeover by UBS Group AG.
On Sunday, one of Switzerland’s biggest newspapers featured a drawing of Credit Suisse Group AG’s headquarters in flames. The image, meant to evoke what the headline said were the bank’s “last days,” was also a metaphor for the embarrassment and consternation the lender’s swift unraveling has caused in its home country.
European banking stocks slumped Monday as investors reeled from the historic weekend takeover of Credit Suisse Group AG that will wipe out a class of bondholders.
Emerging-market stocks slumped and traders bet on bigger swings for currencies after a dramatic weekend of intervention by authorities to contain a banking crisis failed to calm nerves.
DoubleLine Capital’s Jeffrey Gundlach said Credit Suisse Group AG’s bondholders, who are irate after the takeover by UBS Group AG wiped out about 16 billion Swiss francs ($17.3 billion) of risky notes, have only themselves to blame.
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