Moody’s has placed First Republic Bank and five other US lenders on watch pending a downgrade. The move is yet another sign of concern for the health of regional financial institutions following the collapse of Silicon Valley Bank. In addition to First Republic, the institutions under observation, reports Bloomberg, are Western Alliance Bancorp, Intrust Financial, UMB Financial, Zions and Comerica.
Exchanges of Asia and the Pacific falling in the wake of European lists after the crash of the Californian Silicon Valley Bank which however did not drag Wall Street whose futures are positive as are those of the Old Continent’s squares which seem to have changed direction after an initial moment oriented towards a decline. The focus is on US inflation, expected in the middle of the day. Estimates indicate a slowdown in both headline inflation (to 6% from 6.4%) and core inflation (5.5% from 5.6%). In Tokyo, the Nikkei dropped 2.19% with the weight of financials. Hong Kong is also bad, losing 2.3% with ongoing trading with the crash of Hasbc. The decline in Shanghai (-0.72%) and Shenzhen (-0.98%) was more contained. Among others, Seoul lost 2.56% and Sydney 1.41%. With the tensions on the banking system, the markets are looking even more to the next moves of the central banks with less aggressive cuts. Nomura expects the Fed to cut rates by just 0.25% in March. Thursday will be the turn of the ECB and many are wondering whether Frankfurt will continue or will eventually be forced to slow down.
The SVB effect overwhelms the markets
The failure of the Silicon Valley Bank overwhelms the European markets, where the stock exchanges burn 291 billion euros, and sends the banks to the bottom. With Piazza Affari losing 4% and sending 24 billion euros up in smoke. The intervention of the American authorities over the weekend, which also allows unsecured deposits to be paid to customers of the Californian bank which went into default last Friday following the bank run, did not help to avoid a drop in investor confidence. Not only towards the US financial sector after another bank, Signature Bank, went bankrupt on Sunday due to the domino effect linked to SVB and cryptocurrencies. And where there are fears of contagion on a long list of regional banks including First Republic and Western Alliance which on Wall Street have collapsed with losses exceeding 67% despite US President Joe Biden having assured his fellow citizens that their deposits are safe. Confidence has also failed towards European banks and not only in the United Kingdom where Svb UK, the local branch of the Santa Clara group, of which the Bank of England had declared insolvency, was sold for 1 euro to the giant HSBC . Under the wave of sales, all the banking institutions were somewhat overwhelmed, starting with those that had liquidity problems such as Credit Suisse (-9.5%) and Commerzbank (-9.7%), although the rules in Europe are much more stringent than the American ones. In the general collapse of European lists, which burned 291 billion, it was a black Monday more than the others for Piazza Affari: with a 4% crash it did worse than Frankfurt (-3%), Paris (-2.9%) and London (-2.5%) and alone sent 24 billion up in smoke, thanks to the fact that the Milanese stock market is full of financial stocks including Bper and Unicredit which left over 9% on the ground. The reassurances of the Ministry of the Economy led by Giancarlo Giorgetti were of little avail, who recalled that “the Italian and European banking system is regularly monitored by the supervisory and supervisory authorities, thus ensuring its stability”. The analogous intervention of his colleague from beyond the Alps, Bruno Le Maire, had little effect in Paris
Source: Ansa
I am a journalist who writes about economics and business. I have worked in the news industry for over 5 years, most recently as an author at Global Happenings. My work has focused on covering the economy news, and I have written extensively on topics such as unemployment rates, housing prices, and the financial crisis. I am also an avid reader and have been known to write about books that interest me.
