PARIS (Reuters) – The main European stock markets fell on Monday, the emergency rescue of the bank Credit Suisse by UBS plunging the markets into full uncertainty.

In Paris, the CAC 40 lost 0.2% to 6,911.53 points around 09:10 GMT. In London, the FTSE 100 lost 0.9% and in Frankfurt, the Dax fell 0.32%.

The EuroStoxx 50 index is down 0.18%, the FTSEurofirst 300 by 0.63% and the Stoxx 600 by 0.44%.

The crisis in the banking sector is deepening despite the agreement to purchase Credit Suisse by UBS for three billion Swiss francs, as part of an agreement supervised by Swiss regulators and closely monitored by the big moneymakers of the world.

But risk aversion reigns in Europe and previously in Asia as attention focused on what some Credit Suisse bondholders would suffer in the deal.

Swiss regulators have decided that the value of Credit Suisse’s “Additional Tier 1” (AT1) securities will fall from $17 billion to zero to strengthen the group’s capital, raising concerns about the exposure of others financial institutions to this type of debt.

On the stock market, the sanction is very heavy for Credit Suisse which unscrews from 59.68% to 0.75 Swiss francs. UBS yields 10.61%.

“Credit Suisse is our Lehman in Europe, but we know that and we won’t make the same mistake,” said Robert Alster, chief investment officer of Close Brothers Asset Management.

The Stoxx banking index lost 2.15%.

In Paris, Credit Agricole (-1.59%) Societe Generale (-3.89%) and BNP Paribas (-2.50%) fell, as did HSBC (-2.66%) in London and Deutsche Bank (-4.48%).

The renewed aversion benefits gold, up 0.37% and government bonds. The yield on ten-year Treasuries is down six basis points to 3.3356% and its German equivalent is down 13 basis points to 1.99%.

(Laetitia Volga, editing by Kate Entringer)

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