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Saturday, March 25, 2023

Global banking crisis: decisive hours in search of solutions

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A weekend marked by meetings, negotiations and stress in the last hours before the opening of the stock markets tomorrow Monday. The banking crisis unleashed by the bankruptcy of the US bank Silicon Valley Bank, the crisis of the First Republic Bank and the serious problems of the Swiss Credit Suisse have shaken the world markets in recent days, causing fear of a new global financial crisis.

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For the stock markets, it was a black week for the banks and Milan with Piazza Affari was the one that collapsed the most, it fell -6%, the worst in all of Europe since the weight of bank titles is very high.

Fear of global economic crisis

The rise in interest rates by the European Central Bank (ECB) by another fifty basis points last Thursday is one more reason for concern for analysts in the face of the specter of a possible banking crisis that is far from disappearing, despite that the Swiss Central Bank placed $54 billion in bailout of “Credit Suisse” and a group of big banks injected $30 billion in deposits at First Republic Bank, a mid-size US lender.

Seeking to find urgent solutions, Credit Suisse has a decisive day, its financial director, Dixit Joshi, and his teams are holding meetings in these last hours to evaluate strategic scenarios for the bank.

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Against a backdrop of deep concern, Credit Suisse’s chief executive said “the bank is working hard to curb client exits, although this could take time” as shares in the Swiss lender tumbled again as regulators try to seek a agreement with UBS.

UBS intervention

Swiss regulators are encouraging Switzerland’s largest bank UBS – Union de Banques Suisses – and Credit Suisse to merge but, for now, both institutions are reluctant to take the step and regulators have no power to force a merger that raises questions. industrial and antitrust.

UBS would be asking the Swiss government for financial support and to cover some 6,000 million dollars in costs if it buys at least a part of Credit Suisse, according to reports this weekend.

A public offer that would avoid massive layoffs of workers in Switzerland for what is expected with great expectation.


In a weekly context marked by volatility, investor confidence was very fragile, weakening the main stock indices in Europe and Wall Street, which triggered investors to flee to safe haven securities such as gold, where the price of bullion rose to its highest level, registering its highest rise in four months.

Source: Ambito

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