With the collapse of the banking behemoth Credit Suisse last week, Saudi Arabian investors in the company lost billions of dollars, raising concerns about the possibility of a looming worldwide financial crisis.
Almost all of the US$ 1.5 billion investment made by Saudi National Bank (SNB), Credit Suisse’s largest shareholder, has been lost, and the Olayan family, located in Saudi Arabia, also experienced significant losses.
Last week, Credit Suisse, which has been having difficulties for months, requested assistance from the Swiss government. On Sunday, a last-minute agreement was finally negotiated to save the bank’s future and stop the markets from getting into any further panic.
The government-backed Saudi National Bank was allegedly told to make a big investment last year while riding the surge in oil prices following Russia’s invasion of Ukraine by Crown Prince Mohammed bin Salman, who is widely seen as Saudi Arabia’s de facto ruler.
In an effort to diversify its revenue streams and eventually lessen its dependency on fossil fuels, Riyadh has only lately started to see Saudi banks engage in overseas banks and organisations.
The investments were intended to represent the kingdom’s major entry into the world markets, confirming its position as a financial superpower supported by its oil riches.
After the collapse of Silicon Valley Bank in the US on March 10, which was the second-largest financial failure in American history, the world’s banking industry was plunged into pandemonium.
Industrywide uncertainty caused by the collapse has sparked concerns that it may trigger another collapse similar to the one that occurred in 2008, which sent numerous Western countries into recession.
