Banking stocks are enduring fresh, steep losses on Wednesday as concern over the health of US banks crosses the Atlantic.

Credit Suisse shares plunged to new record lows following comments by its largest investor that it could not provide the Swiss bank with more financial assistance.

Switzerland’s second-largest bank, no stranger to crisis over the past few years, has seen concerns for its financial health come into sharper focus since the collapse of Silicon Valley Bank last week.

The attention of investors has mostly been on the ability of lenders to absorb the aggressive tightening of interest rates since last year, which has soured their bond holdings.

Adding to the selling mood was speculation that the European Central Bank (ECB) planned to raise its core deposit rate by 0.5 percentage points this Thursday.

A source close to the ECB Governing Council, the Reuters news agency reported, had said that the ECB was unlikely to ditch plans for a big rate move this week because that would damage its credibility.

Analysts backed that assessment.

Investors took to the hills, with the European banking index down by almost 6%, leaving it on course for €120bn of losses since the crisis of confidence began last week.

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Credit Suisse shares were more than 20% lower.

In London, the FTSE 100 was trading 2.5% down by late morning, blow the level it had started 2023.

Financial stocks were again enduring the worst of the pain.

US equity futures were sharply lower.

Attention, however, was firmly focused on Credit Suisse.

Its largest shareholder, Saudi National Bank (SNB), said it would not buy more shares on regulatory grounds as it would take its stake above 10%.

A string of scandals have undermined the confidence of its investors and clients, with Credit Suisse customer outflows in the fourth quarter rising to more than 110 billion Swiss francs (£100bn)

SNB said it was happy with Credit Suisse’s turnaround plan and did not think it would need more money.

That was despite its annual report for 2022, released earlier this week, admitting that “material weaknesses” in controls over financial reporting had been identified and customer outflows had not yet been stemmed.