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Thursday, March 30, 2023

Bank crash: 11 US giants vowed to bail out the First Republic

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After a turbulent week, 11 banking giants in the United States pledged on Thursday to rescue the entity. First Republicwhich allayed fears of a new bankruptcy after the collapse of Silicon Valley Bank, Signature Bank and Silvergate last week.

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This news was celebrated by the Federal Reserve (Fed), the United States Treasury and two regulators, at a time of fear among investors of a risk of contagion to other banking entities.

Since March 10, a series of bank failures in the United States fueled fears of a new financial crisis like the one in 2008, which destabilized the world economy.

An indication of the financial stress is that US banks have taken out loans for US$164.8 billion of two lines of credit from the Fed in recent days, according to the financial agency Bloomberg.

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Despite the installed firewalls, First Republic stock was down 13% in pre-open electronic trading.

Markets down again

The markets returned to operate with losses this Friday in the middle of the day in Europe, after a new collapse of Credit Suisse devastated the optimism of the beginning of the day.

Expectations placed on firewalls to help banks boosted trading in Asia and early trading in Europe, but Credit Suisse’s persistent stock market decline reversed the trend.

The shares of the Swiss bank – which have concentrated concerns about the sector in Europe – fell around 12:17 GMT by 11.10%.

The bank already suffered spectacular stock market crashes this week and, given fears for the banking sector, received a bailout from the Swiss central bank to strengthen its liquidity.

At midday, the FTSE 100 index in London lost 0.29%, the CAC 40 in Paris lost 0.59% and the DAX in Frankfurt fell 0.39%.

In Madrid, the Ibex-35 also operated with losses, with a fall of 1.39%.

On Wall Street, futures were also in the red, with the Dow Jones down 0.50%, the S&P 0.52% and the Nasdaq 0.11%.

Source: Ambito

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