The world markets turn sharply downward this Wednesday after the Credit Suisse announced that it will not invest any more and the swap of default. In this context, European banks collapse again and stock markets collapse.
The loss of confidence is contagious in a sector as sensitive as banking and the result is a collapse in the main world stock markets led by the Spanish IBEX (-3.4%), followed by the main benchmark of Italy (-3.2%), the French stock market ACC 40 (-2.97%) and the EURO STOXX 50 (-2.8%) awaiting definitions of the European Central Bank (ECB).
Spanish banking suffers the worst collapses: Sabadell (8.7%), BBVA (-7.2]), bankinter (-7.1%), Santander (-6.6%), CaixaBank, 6.1%). Shares of several European banks, including Credit Suisse, Societe Generale and Italians Monte dei Paschi and UniCredit, stopped trading due to falling prices, the CBDC reported.
The contagion effect spreads regardless of the strength of bank balance sheets. The actions of UBS, BNP Paribas, UniCredit, Monte dei Paschi either Societe Generale they suffer corrections that are close to 10% at times. The banking sector index Stoxx Europe 600 Banks records losses of more than 5%.
Financial tensions could persist if the information published this morning is confirmed. The Reuters agency assures, citing a close source, that the European Central Bank would have decided to raise interest rates by 50 basis points, as planned before the financial alerts.
What is the situation of the financial system in Uruguay?
In the midst of the international financial crisis caused once again by the big banks, the Central Bank of Uruguay (BCU) It is worth asking if the national financial system is prepared to face international turbulence.
At the end of last year, the Financial Stability Committee –composed of the (BCU), the Bank Savings Protection Corporation and the Ministry of Economy and Finance (MEF)– issued a statement in which it stated that the domestic financial system is stable and in a position to face the challenges presented by an international panorama loaded with uncertainty.
“The very capacities of the financial system, within which its solvency and liquidity levels stand out, determine that it is in a position to contribute to risk management, thus facilitating the present and future performance of the economy,” he said.
according to Financial System Report of the second of the third quarter of 2022, which allows us to see the annual trajectory of the liquidity Of the banks in Uruguay, the 30-day ratio remained stable over the last year, above 80%, while the 91-day ratio showed the same activity.
He tension scenario measured by the Superintendency of Financial Services The BCU for the last time in August 2022 showed that risk assets in a crisis scenario are 7.7% and in an adverse one 16.07%.
Meanwhile, the Central Bank of Uruguay (BCU) had announced in January that it will increase the countercyclical capital buffer (CCC) of 0.25% to 0.50% from January 1, 2024. The decision was based on the upgraded cycle clock which indicates that the Uruguayan economy “is in a recovery phase, and has been consolidated supported by the growth of exports and investment”.