Banks led stock markets lower on Monday and safe havens such as bonds rallied as a weekend deal to rescue Credit Suisse and promises of liquidity from central banks could not stem fears that a bigger crisis is brewing in the financial system.
n Dublin, Irish stocks fell in early trading. Bank of Ireland was the hardest hit among the Irish banks, with share dropping by 6.35pc this morning.
AIB Group shares were down 4.8pc , while Permanent TSB shares fell by as much as 5.86pc.
Internationally trading names were also leading the index lower, with Kingspan shares down 3.28pc and Ryanair down 1.46pc this morning.
Asia gains for S&P 500 futures and European futures reversed as the sun rose in London. S&P 500 futures were last down 1pc. European futures dropped 1.2pc and FTSE futures fell 1.5pc, and investors rushed to price in interest rate cuts.
In Hong Kong, HSBC stock dropped 7pc in its worst session for six months. Standard Chartered shares fell nearly 8pc and turnover was high. Tokyo banks dropped 1.9pc and bank stocks led a 1.6pc drop for MSCI's broadest index of Asia-Pacific shares outside Japan .
Over the weekend, UBS said it would buy Credit Suisse for 3 billion francs ($3.2bn). The Federal Reserve, European Central Bank and Bank of Japan pledged to make it even easier to buy dollars, upping the frequency of supply operations.
But with some Credit Suisse bondholders in line to be left with nothing, and nerves running high after a week where concerns mushroomed that regional U.S. lenders to large systemic bank in the heart of Europe, investors do not feel like taking risks.
"Banking is a confidence game, so it remains to be seen whether the actions taken over the weekend will restore confidence to depositors. Although it feels like 2008, the capital levels and the regulatory framework in the euro area in particular is in a vastly different place,” Goodbody chief economist Dermot O’Leary.
"If this crisis passes relatively quickly, central bankers’ attention must then shift back to solving the inflation problems.”
Shares in Credit Suisse dropped 61.95pc in premarket trading in Zurich on Monday.
Credit Suisse shares were quoted at 0.61 Swiss francs ($0.6578) in Julius Baer premarket trading, while those in UBS were down 4.73pc at 15.81 francs.
"The next few hours of trading will give us a better picture on whether the crisis is contained," Ipek Ozkardeskaya, a senior analyst at Swissquote Bank, said.
"In theory, there is no reason for the Credit Suisse crisis to extend, as what triggered the last quake for Credit Suisse was a confidence crisis, which doesn't concern UBS - a bank outside of the turmoil, with, in addition, ample liquidity and guarantee from the Swiss National Bank and the government."
Several nagging issues are in focus.
One is that despite liquidity support, deposit guarantees and - in the case of Credit Suisse direct borrowing from the central bank - have not been enough to cauterize the situation.
Another is that some junior bondholders appear to be left with nothing at all after Credit Suisse said such debts will be written down to zero - spooking holders of similar paper at other banks and raising the spectre of bank funding stress.
"Investors are trying to price out stability risks, but also having to process having their assets written down to save depositors," said Damien Boey, chief equity strategist at Sydney-based investment bank Barrenjoey.
"The key question is whether solvency or liquidity concerns are sufficiently addressed by bailout/merger attempts to make deposit runs stop. The answer isn't clear yet."
Rates pricing is also likely to remain volatile while there is concern over regional banks in the United States.
A US official said on Sunday that deposit outflows had slowed and in some cases reversed. But First Republic also had its credit rating pushed deeper into junk status by S&P Global and elsewhere efforts to raise capital were hitting difficulties.