European stock markets fall sharply driven by falls in the banking sector

The ace european bags They fell hard this Wednesday, sunk by fears in the banking sectorwhich continues to feel the effects of recent bankruptcies in UNITED STATES.

Around 10:30 GMT, Paris lost 3.23%, Milano 3.48%, Madrid 3.09% y frankfurt 2.50%.

Bank stocks were particularly under pressure as investors continued to worry about tensions within the sector following the collapse of Silicon Valley Bank (SVB): index Euro Stoxx Bank guys 5.6%while Swiss credit fell to one 20% always historically low after comments from its largest shareholder that it would not provide more capital. Besides, Societe Generale lost one 9.6%, Bank of Ireland lost one 9.2% there BNP Paribas guys 8.8%.

The panic in the financial markets over the past seven days has come from two medium-sized and regional banks in the United States: the SVBspecializing in financing start-ups, with 8,500 employees worldwide and headquarters in Santa Clara (California), and the New Yorker Signature Banksmaller and with its activity oriented towards cryptocurrency companies which two years ago represented 30% of its deposits.

Financial regulators and leaders around the world have tried to reduce contagion problems, but concerns persist about the health of smaller institutions in particular.

Rapid increases in interest rates have made it difficult for some businesses to repay or repay the loans they have taken out with banks, thus increasing the chances of losses for lenders who are also worried about a recession.

However, policy makers in the European Central Bank still leaning towards a half-percentage-point rate hike on Thursday, source says Reutersbecause they expect inflation to remain too high in the coming years.

Investors had begun to doubt the commitment of the ECB with another sharp rise in rates, such as the collapse of SVB shocked all markets.

But the source said it’s Eurozone central bank unlikely to abandon plan to hike rates by 50 basis points Thursday, because it would damage his credibility.

In UNITED STATESattention turns to the possibility of a tighter regulation of banksespecially mid-tier ones like SVB and Signature Bank.

The closure of SVB on March 10, followed two days later by the bankruptcy of Signature Bank, forced the president Joe Biden to rush to keep the U.S. financial system safe and prompted emergency measures that allowed banks to access more funds.

In order to avoid a similar crisis in the future, the US Federal Reserve is also considering stricter rules and supervision for mid-sized banks similar to the SVB.

Moody’s Investors Service on Tuesday revised its outlook for the The US banking system has moved from “negative” to “stable”citing heightened risks for the sector.

In Wall Streetthe benchmark S&P 500 index future lost 1.6%. the one with the index finger Dow Jones lost one 1.6%.

In Asiathe banking index of the Stock Exchange Tokyo lost more than 4%after three consecutive days of strong sales.

Investors were particularly worried about huge bond holdings, particularly US Treasuries, held by Japanese lenders, but Japan’s finance minister, Shunichi Suzukisaid on Wednesday that differences in the structure of bank deposits meant that local banks would not face incidents similar to SVB.

(With information from Reuters, AFP, EFE)

Continue reading: