Swiss financial regulator FINMA on Monday said it was closely monitoring the banks and insurers it oversees after the U.S. moved to guarantee the deposits of two failing lenders in an effort to stem contagion.

Credit Suisse’s shares fell to a new low on Monday, while the cost of insuring its debt against a default rose to an all-time. Shares of Swiss rival UBS slumped more than 7%.

“FINMA takes note of the media reports on Silicon Valley Bank and Signature Bank in the USA and is closely monitoring the situation,” FINMA said in a statement.

“FINMA is evaluating the direct and indirect exposure of the banks and insurance companies it supervises to the institutions concerned,” it said. “The aim is to identify any cluster risks and potential for contagion at an early stage.”

FINMA said it was in contact with various institutions which could be affected, but declined name them or the measures it might take.

U.S. President Joe Biden pledged on Monday to do whatever was needed to address a banking crisis precipitated by the collapses of Silicon Valley Bank and Signature Bank which forced regulators to step in with emergency measures.

FINMNA said its supervisory activities were focused on the risk management of supervised institutions and on dealing with various scenarios.

The Swiss National Bank declined to comment on the effect of the Silicon Valley Bank’s collapse could have on Switzerland’s financial sector.

In a further of investor concern about Credit Suisse’s outlook, the price of some of its bonds fell sharply, with some at record lows.

Struggling to recover from a string of scandals, Switzerland’s second-biggest bank has begun a major overhaul of its business, cutting costs and jobs and creating a separate business for its investment bank under the CS First Boston brand.

Last week it announced it was delaying the publication of its annual report following a call from the U.S. Securities and Exchange Commission.

Fallout Spreads

Germany’s Bundesbank convened its crisis team on Monday to assess the possible fallout of the collapse of SVB on the local market, even as no emergency action was foreseen in Europe.

Earlier on Monday the Bank of England facilitated a private sale of the UK arm of Silicon Valley Bank to HSBC in a move which would protect deposits without taxpayer support

Europe’s STOXX banking index .SX7P fell 5.8% on Monday and was on track for its biggest two-day fall since March 2022, soon after Russia invaded Ukraine. Germany’s Commerzbank CBKG.DE fell as much as 12.7%.

(Reporting by Paul Arnold, Chiara Elisei and Noele Illien; writing by John Revill, editing by Rachel More and Elisa Martinuzzi)

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