Credit Suisse Group AG shares plunged and credit default swaps were near a distressed level after its biggest shareholder ruled out any additional support. 

Saudi National Bank Chairman Ammar Al Khudairy said “absolutely not” in response to a question on Wednesday about whether the bank was open to further injections if there was another call for additional liquidity.

The comments sent Credit Suisse shares down 20 per cent in the biggest one-day selloff on record. Traders were seeing prices of as high as 1,200 basis points on one-year senior credit-default swaps on Wednesday morning, according to two people who saw the quotes and asked not to be named. The last recorded quote on pricing source CMAQ stood at 835.9 basis points on Tuesday. 

The panic selling spread to European banks and dragged US stock futures lower. Two-year yields on German bunds fell 33 basis points, in a further sign of flight to safety. 

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A gauge for the European banking sector declined 7 per cent, reaching the lowest since early January, and BNP Paribas SA sank 11 per cent. The combined market value lost among European banks was more than $60 billion on Wednesday.

“Markets are very sensitive to the negative news flow after the surprise of seeing a US bank disappear from one day to the other,” said Francois Lavier, head of financial debt strategies at Lazard Freres Gestion. “In a context where market sentiment is already weakened, not much is needed to weaken it even further.” 

Credit Suisse is just months into a complex turnaround plan that will see the Swiss firm spin out the investment banking unit while focusing on its key wealth management business. That effort risks being further complicated by market unease across financials after the collapse of multiple US regional banks. 

Also read: How SVB and Signature Bank failed so quickly — and why the US banking crisis still persists

A spokesperson at Credit Suisse declined to comment when contacted by Bloomberg News. Chief Executive Officer Ulrich Koerner said in a Bloomberg Television interview on Tuesday that business momentum improved this quarter and that the bank attracted funds after the collapse of SVB.

Shares of large US lenders sank in premarket trading. Bank of America Corp. fell as much as 3.9 per cent and Wells Fargo & Co. dropped 4 per cent. Citigroup Inc. shares declined 3.8 per cent

In the credit market, spreads of more than 1,000 basis points in one-year senior bank CDS are extremely rare. Major Greek banks traded at similar levels during the country’s debt crisis and economic slump. The level recorded on Tuesday is about 18 times the contract for a rival Swiss bank, UBS Group AG, and about nine times the equivalent for Deutsche Bank AG.

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The CDS curve is also deeply inverted for the bank, meaning that it costs more to protect against an immediate failure, instead of a default further down the line. The lender’s CDS curve had a normal upward slope as recently as Friday. Traders typically ascribe a higher cost of protection over longer, more uncertain periods.

“When we have this kind of material risk, it takes some time for calm to come back to markets,” said Frederic Dodard, head of asset allocation at State Street Global Advisors Ltd. “We could continue to see market swings for a few days, especially with central banks meetings this week and next week. They could help restore confidence or even worsen it. We’re not out of the woods yet.”