Biden has assured Americans that the banking system is “secure” despite the bankruptcy of SVB Bank. / AFP
Wall Street closed irregularly but bucked Monday after the recent bank failures in the US. Meanwhile, European stock markets closed sharply lower on fears of contagion to the sector.
The crisis ravaging the U.S. banking sector has led Wall Street to start trading in the red, prompting authorities to guarantee all customer deposits after the shutdown of Silicon Valley Bank (SVB).
But then the world’s largest stock market recovered and ended up pretty close to equilibrium. He explained that this was in part thanks to a “rate-sensitive sector that has risen due to falling bond yields” from the Treasury Department. Analysis by Edward Moya of Oanda.
“Concerns about regional banks still exist,” said Nick Reese of Guinness Global Investors. “Some fear another bankruptcy,” he said.
First Republic is at the forefront of losses in the stock market, down 61.83%. By assets, he is the 14th largest financial institution in the United States.
Other regional banks were also hit, including Western Alliance (-47.06%), Cleveland KeyCorp (-24.3 6%) and Comerica Bank (-27.67%).
Will there be a crisis like 2008?
“We are not in the same situation, we are in a limited situation with certain types of banks and certain sectors of customers,” Eric Dor of IESEG Business School told AFP. .
Lionel Melka, an associate at investment firm Swan, believes SVB remains a “pretty special case” and that the banking crisis has already been “contained” by measures by US authorities to guarantee all deposits. .
The US central bank, the Federal Reserve (Fed), has also pledged to lend to other banks that need it to meet their customers’ withdrawal requests.
Germany’s largest asset manager, DWS, points out that in 2008 “banks are in a much stronger position than they were before the financial crisis”.
Roberto Arguello, president of consulting firm CEO Advisors, added that “nothing will happen” and believes US banks are “very solid”. The analyst asserted that SVB’s crisis was foreseeable because it had a “poor business model.”
Little known, SVB specializes in lending to startups and has become the 16th largest bank in the United States by assets. As of the end of 2022, he had $209 billion in assets and about $175.4 billion in deposits.
A voice calling for calm.
President Joe Biden said the banking system is “safe despite three bank failures in less than a week.
“They can trust the banking system to be secure. Biden said in televised remarks at the White House that deposits would be there (available) when needed.
Biden stressed that investors who bought SVB should take risks and bear the consequences: “This is how capitalism works.”
Key
“as”
It all started Wednesday after the announcement of the liquidation of Silvergate Bank, a small bank that has become a destination for cryptocurrencies.
“Contagion”
The Federal Reserve announced that Signature Bank, the country’s 21st bank by size, stepped in while SVB suffered a capital outflow.
“Crisis”
The failure of Silicon Valley Bank blocked tens of billions of dollars in deposits by start-ups and private equity funds.
Source: Diario.Elmundo
