March 20 Reuters European stocks fell on Monday and shares of Credit Suisse dived more than 60 after UBS agreed to buy the troubled bank in a 3 billion deal, valuing the Swiss lender at just a fraction of its market value and sparking fears of a broader banking crisis.

The panEuropean STOXX 600 index fell 0.8 by 0807 GMT, after having recorded its biggest weekly decline of the year on Friday.

Shares of Credit Suisse slumped 62.3 after rival UBS Group AG said it will pay 3 billion Swiss francs 3.23 billion for the 167yearold bank and assume up to 5.4 billion in losses, in a package orchestrated by Swiss regulators on Sunday.

Shares of UBS dropped 8.8.

Investors were also spooked by news that Credit Suisse additional tier1 bonds or AT1 bonds with a notional value of 17 billion will be valued at zero, angering some of the holders of the debt who thought they would be better protected than shareholders.

The wider European banking index slid 3.2 to hit its lowest level in three months.

Reporting by Sruthi Shankar in Bengaluru; Editing by Sherry JacobPhillips

Source Reuters