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Banking crisis in the United States: European banks sink in the stock market for fear of contagion

2023-03-13T14:17:57.937Z


The bankruptcy of two banks in the US plunged European financial institutions in the markets on Monday.


The large European banks suffer on the Stock Market this Monday

with falls that exceed 10%

in some cases, and drag down the main European indices due to the

unforeseeable consequences

for the sector that the bankruptcy of the American

Silicon Valley Bank may cause.

and Signature Bank.

On a day without relevant macroeconomic data, fears of a contagion across the banking sector are hogging investors' attention, although analysts believe there is

little chance of it happening.

"We understand that (in Europe) the risks of contagion are more limited as long as we are talking about more diversified entities -not concentrated in a single sector such as

technology-

", indicates the investment manager Renta4 in a market report on Monday .

The German Commerzbank fell 10.2% this Monday.

Photo: Daniel Roland/ AFP

Singular Bank adds that "the prompt and (...) wise joint intervention" of the Federal Reserve (Fed), the Treasury and the FDIC (Federal Deposit Insurance Corporation)

to guarantee deposits

"should serve to reassure investors ".

However, the financial sector has been sinking on the stock market since the opening of the markets and during the morning of Monday the falls had increased in Europe.

The largest decreases were for the French Crédit Agricole, of 14.34%;

the German Commerzbank, 10.2%, as well as the Spanish

Banco Santander, 8.27%, with a significant presence in Latin America.

In Italy, Unicredit lost 7.84%;

and Intesa Sanpaolo, 6.83

The Spanish Banco Santander, with an important presence in Latin America, lost 8.27%.

Photo: Gabrie Bouys/ AFP

The French BNP Paribas left 6.39%;

ING (Netherlands), 6.98%;

and BBVA (Spain), 7.04%.

In the UK, Barclays fell 5.36%;

and HSBC, 4.7%.

The main European stock indices posted

the biggest falls so far this year

, a period that has been characterized by a large stock market appreciation so far.

Milan fell 4.09%;

Madrid, 3.29%;

Frankfurt, 3.18

The trigger for the SVB's intervention was

a lack of liquidity,

which forced it to

sell part of its portfolio of debt bonds

at a loss.

This, in turn, pushed him to announce a failed capital increase to improve his accounting situation for which

he found no funds.

Over the weekend,

Signature Bank was closed

to prevent panic from spreading to other banks and the system as a whole.

EFE

ap

look too

Three lessons from the failure of Silicon Valley Bank

Banking crisis in the United States: Joe Biden spoke and said that Americans can have confidence in the system

Source: clarin

All news articles on 2023-03-13

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