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Friday, March 31, 2023

European banks sink: four entities paralyze their listing

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The truce achieved by the financial markets on Tuesday after the bankruptcy of 2 banks in the US was short-lived. This Wednesday, March 15, the markets turn sharply downwards after Credit Suisse announced that it will not invest any more.

Photo: Madridiario

The truce achieved by the financial markets on Tuesday after the bankruptcy of 2 banks in the US it was ephemeral This Wednesday, March 15, the markets turn sharply downwards after the Credit Suisse will announce that it will not invest any more and the default swap will be triggered. 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 IBEX (-3.4%), followed by the main reference index of Italy (-3 .2%), the French stock market CAC 40 (-2.97%) and the EURO STOXX 50 (-2.8%) awaiting words from the European Central Bank (ECB).

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Spanish banks suffer 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 through European banks, regardless of the strength of their balance sheets. The actions of entities such as UBS, BNP Paribas, UniCredit, Monte dei Paschi or Société Générale they suffer corrections that are close to 10% at times. The Stoxx Europe 600 Banks banking sector index registers 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. Analysts take it for granted that the Fed will reduce its pace of rate hikes. This information now cools expectations of greater restraint by the ECB.

What is known about Credit Suisse

He Credit Suisse it collapses again on Wall Street up to 20% in premarket in a new day of tension. The Swiss bank ruled out increasing its investment when seeing the difficulties that the company is going through in recent times. Thus, the bank’s shares mark new historical lows and there is a risk of default. The fall, as it happened on Monday, drags down the entire financial sector.

“The answer is absolutely no, for many reasons, apart from the simplest, which is regulatory and statutory,” said the president of the Saudi National Bank, Ammar Al Khudairy, in an interview with Bloomberg TV this Wednesday. The bank, owned by the nation’s sovereign wealth fund, This was in response to a question about whether the bank was open to new injections into Credit Suisse in the event that there was another request for additional liquidity.

Source: Ambito

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