US President Joe Biden managed to calm the situation down again after the Silicon Valley Bank was closed.
Now it's up to the US Federal Reserve to help the faltering financial institutions.
A commentary by Georg Anastasiadis.
Investors are shy creatures who quickly panic when they suspect danger.
The turbulence after the collapse of the American Silicon Valley Bank was correspondingly severe.
The prices of money houses fell worldwide and dragged other market segments down with them.
Whether these were the harbingers of a new global financial crisis or simply an overreaction depends on whether the US government and the Federal Reserve manage to quickly restore investor and bank customer confidence and prevent customers from looting their accounts.
President Biden's promise that all deposits are safe has calmed the situation noticeably.
Will the Fed surprise the markets with a rate cut anytime soon?
It is correct: the sharp turnaround in interest rates implemented by the US Federal Reserve Bank to combat inflation has brought some serious losses to many banks that had previously gorged themselves on low-interest and thus unattractive securities.
But it is also true that after the global financial crisis of 2008/2009, financial institutions are regulated more strictly all over the world and also have to hold more equity.
That speaks against a new financial crisis.
In the favorable scenario, things could turn out very differently - if the US Federal Reserve abruptly ended its unprecedented series of interest rate hikes from 0.25 to 4.75 percent within a year in order to give the tottering financial institutions (and the election-campaigning US President) to help.
Recently, more and more experts have spoken out, accusing the central bank of overdoing it in the fight against inflation and driving the economy into recession.
The first investment banks, such as the Japanese Nomura, are expecting the Fed to surprise the markets with a rate cut as early as next Wednesday and to reverse its policy of withdrawing money.
This would also put other central banks such as the European Central Bank under pressure.
George Anastasiadis