The suggestion of a limit to support for Credit Suisse, which has reported a 7.3bn Swiss francs (£6.6bn) loss for 2022, sent its shares down more than 30% during the day.

The bank, Europe's 17th largest lender, has been struggling to keep customers after a string of scandals in recent years. Credit Suisse strengthened its balance sheet with a 4bn Swiss francs (£3.6bn) fundraising in November designed to finance a restructuring plan.

Credit Suisse isn't alone in being mired by scandal, many of the big banks have been, including Deutsche Bank, Danske Bank, J P Morgan, Barclays, and HSBC - but, as powerful tools of the establishment, they're essentially all at it.

In a statement on Wednesday, the chairman, Axel Lehmann tried to reassure customers and investors, saying: "We have strong capital ratios, a strong balance sheet. We already took the medicine."

Investors are worried about potential unrealised losses lurking in the portfolios of other European banks. As traders dumped stocks, more than £75bn was wiped off London's blue chip index. The FTSE 100 was down 3.83%, marking its sharpest one-day drop since Russia invaded Ukraine in February last year. UK-headquartered Standard Chartered fell 7.7% and HSBC, which bought the UK operations of Silicon Valley Bank in a government-brokered deal on Monday, dropped 5%. Barclays fell 9%.

Credit Suisse shares recovered slightly but still ended the day down 24.5%. The cost of insuring against Credit Suisse defaulting on its bonds also hit a record high on Wednesday.

Shares in other big European banks slumped on the news, with the gyrations triggering stock market circuit breakers that briefly halted trading in Société Générale, BNP Paribas, Monte dei Paschi di Siena and UniCredit. The Swiss lender UBS dropped 8.7% and Germany's Deutsche Bank slipped 9.2%.

Regulators in the US and UK were monitoring the situation as stocks continued to slide.

The Bank of England said the UK banking system was not at risk. The central bank, which is in charge of monitoring financial stability, referred to its statement released earlier this week, which said: "The wider UK banking system remains safe, sound, and well capitalised."

Echoes of the crash of 2007-8 abound.

Credit Suisse's problems - which have led to a leadership overhaul and sparked a wide-ranging turnaround plan in recent months - are relatively unique and should not come as a surprise to investors, according to some analysts.

The lender has been trying to draw a line under multiple scandals over the past decade involving corporate espionage, alleged misconduct, sanctions busting, money laundering and tax evasion.

In the past two years alone, Credit Suisse has admitted to defrauding investors as part of the Mozambique "tuna bonds" loan scandal, resulting in a fine worth more than £350m; and been embroiled in the collapse of the lender Greensill Capital and the US hedge fund Archegos Capital in 2021. It also came under fire after the Guardian and other media outlets revealed the bank had been serving clients involved in torture, drug trafficking, money laundering, corruption and other serious crimes over decades.

The bank has since suffered an exodus of clients, who have continued to pull their cash, contributing to ballooning losses that grew to 7.3bn Swiss francs in 2022. It has since been abandoned by its former top shareholder, Harris Associates, which revealed earlier this year that it had dumped its entire stake amid frustration over Credit Suisse's strategy and failure to stem losses.

However, Andrew Kenningham, the chief European economist at Capital Economics, said there are still questions about potential weaknesses across the financial system. "The problems in Credit Suisse once more raise the question whether this is the beginning of a global crisis or just another "idiosyncratic case", he said. Credit Suisse was widely seen as the weakest link among Europe's large banks, but it is not the only one to have struggled with weak profitability in recent years.

The high-profile economist Nouriel Roubini, known as Dr Doom for having predicted the 2008 financial crisis, warned that while Sillicon Valley Bank's collapse had a "ripple effect" on the financial sector, any potential failure by Credit Suisse could prove to be a "Lehman moment", referring to the collapse of the US investment bank Lehman Brothers in August 2007 that sparked the global banking crunch.

The 'crunch' that resulted in hundreds of billions being robbed from the tax payer to (temporarily) prop up criminal banks.

Markets are now expecting that central banks including the Bank of England may hold back from raising interest rates further, amid fears that further hikes could increase pressure on investment portfolios.

Silicon Valley Bank collapsed shortly after revealing it had a hole in its finances, caused by a drop in the value of bonds that it tried to sell to make up for a drop in its tech customers' deposits. Those bonds had dropped in value due to recent interest rate hikes. The shortfall spooked investors, led to a share sell-off and a run on its deposits, before authorities stepped in last week.

The Bank of England had been given an almost 100% probability by traders in financial markets of raising rates by 0.25 percentage points at its next meeting on 23 March. However, that has since fallen to 40%.

Saudi National Bank gained its 9.9% stake in Credit Suisse this past autumn, after investing 1.5bn Swiss francs as part of a 4bn Swiss franc capital fundraising to support Credit Suisse's turnaround plan, which is meant to cut the size of it

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Former Australian Prime Minister Paul Keating has fired a broadside against the current government for its endorsement of the AUKUS security bloc and the purchase of American submarines. It doesn't help protect the country and drags it into the US attempt to preserve its hegemony by containing China, he has argued.

Keating, who chaired the Australian government in the 1990s, reiterated his negative view of the purchase of Virginia-class nuclear-powered boats in a lengthy rebuke this week. He branded it the "worst international decision" by an Australian Labor government since conscription in World War I. "It must be the worst deal in all history."

The Australian Royal Navy is buying up to five attack submarines from the US and possibly building three more with the UK's help. The deal is estimated to cost 360 billion Australian dollars ($240bn).

With that investment, Australia could have 40 to 50 domestically-built Collins-class diesel-electric submarines instead, Keating suggested.

A larger fleet would be far better at protecting Australia from a possible invasion, which would require an "armada of troops ships" reaching its coast, he believes. Meanwhile, the nuclear subs would be sent to the Chinese coast to potentially take part in a US-Chinese conflict, the former prime minister suggested.

"It's a strange way to defend Australia to have your submarines sunk on the Chinese continental shelf chasing Chinese submarines. We are part of a [US] containment policy against China. It's about one matter only: the maintenance of US strategic hegemony in Southeast Asia."

The politician dismissed as "rubbish" the idea that China poses a military threat to Australia in the first place and shamed national journalists peddling it.

The trilateral bloc has "gone further down a wrong and dangerous road," Chinese Foreign Ministry spokesman Wang Wenbin said commenting on US President Joe Biden's decision to supply the military hardware to Australia.

Wang warned that the deal could have broader implications towards peace in the Indo-Pacific region, and might "stimulate an arms race, undermine the international nuclear non-proliferation system and damage regional peace and stability."

When asked on Monday if Beijing was justified in considering the nuclear submarines deal as a security threat or an act of aggression, Biden responded: "No."

A joint statement released by Biden, Sunak, and Albanese on Monday said that the "historic" deal indicated the three nations sought to "sustain peace, stability and prosperity around the world."

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