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Credit Suisse Crash and Debt Increase: Is the Market Approaching Its Lehman Moment?

The market may be nearing its Lehman moment yet again, according to Art Cashin, the director of floor operations at UBS.[0] Panic has spread overseas to Credit Suisse, which saw its stock plunge 30% in a day after a top shareholder said it could not provide further financial support due to a regulatory limit.[1] Cashin said certain market participants may be trying to “agitate things as much as possible” for their own financial gain.[1]

The European Central Bank is seen scaling back rate hikes at its meeting on Thursday and Goldman Sachs analysts lowered their 2023 GDP forecast on March 15 citing a pullback in lending from small- and medium-sized banks.[2] JPMorgan Chase & Co. predicted that the US economy could suffer a decrease in its gross domestic product by 0.5-1% due to the decreased lending activity that has occurred since the recent banking-sector issues.[3]

The amount of debt Americans are carrying has soared.[4] Credit card balances increased by $61 billion to a record high of $986 billion in the last quarter of 2022 and the percentage of credit card holders carrying debt from month to month has increased to 46%, up from 39% a year ago.[4] Auto loan balances have risen and delinquencies have been steadily rising from their pandemic lows.[4]

Further spooking markets on March 16, First Republic Bank, which was downgraded by both S&P Global Ratings and Fitch Ratings on March 15, is exploring strategic options — including a sale.[5]

The confidence crisis in Credit Suisse Group AG, a significant contributor to the worldwide financial system, is intensifying, and the potential of a bank-lending crisis that could cause economies to enter a recession is growing.[3] The risk is that the turmoil in the banking sector can tighten the credit squeeze already set in motion by interest-rate increases and lenders will now be far more concerned with shoring up their own finances than providing the loans that enable economies to grow.[3]

0. “The market is on the verge of a Lehman-style event as the financial world thrashes in the wake of global banki” Business Insider India, 17 Mar. 2023,

1. “The market is on the verge of Lehman-style event amid banking turmoil” Markets Insider, 17 Mar. 2023,

2. “Recession Fears Soar as Credit Suisse Woes Threaten Loan Crunch” Yahoo News, 16 Mar. 2023,

3. “Analysis | Behind the Banking Crisis, an Era of Easy Money's End: QuickTake” The Washington Post, 19 Mar. 2023,

4. “Shrinking savings and rising debt leave consumers on shaky financial footing” AOL, 18 Mar. 2023,

5. “Odds of Recession Increase 10% After Bank Failures” Yahoo Entertainment, 16 Mar. 2023,