The main stocks of the European banking sector are falling on the stock market, as concerns grow over the risks of contagion following the collapse of the Silicon Valley Bank. On the edge of the precipice, Credit Suisse worries and connects the bad news.
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Credit Suisse, BNP Paribas, Société Générale : les banques européennes plongent en bourse
The main banking indices are unscrewing
Concerns about the risks of contagion are intensifying this Wednesday, March 15, after the setbacks of Silicon Valley Bank. Despite a brief respite yesterday, on the sidelines of communications from the Chairman of the US Federal Reserve (FED), European markets fell sharply again today.
“Calm down. Calm down, and look at the reality […] the French banking system is not exposed to Silicon Valley Bank”. Despite a reassuring speech from Bruno Le Maire, Minister of the Economy, investors feared cascading bankruptcies following the collapse of SVB.
However, the main European banking stocks have indeed been shaken. At the time of writing these lines, BNB Paribas and Société Générale fell by 9.59% and 11.9% respectively. Germany’s largest bank, Deutsche Bank, fell 7.83% today. The Euro Stoxx Banks index fell by 6.84%.
The main European banking indices at 3:55 p.m., Wednesday, March 15, 2023
Some observers see Bitcoin (BTC) acting as a safe haven against bank failure. Although this opinion is not shared by the majority, the fact remains that the market’s leading cryptocurrency printed 20% in 3 daysor as soon as the announcement of the collapse of SVB and the start of fears of contagion.
As our expert financial market analyst, Vincent Ganne, points out to Cryptoast Research subscribers, the $25,000 threshold is an important pivot to cross and consolidate to definitively mark the return of the bull market. In parallel, the support of 19,800 dollars – former ATH – was perfectly held:
“In weekly data, what we see is that the essential has been preserved, it was the graphic border of 19,800 dollars. »
👉 Also in the news – Banking panic: Bitcoin (BTC) increases by more than 18% in 24 hours
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Credit Suisse worried
To return to the main subject of this article, the brutal increases in central bank interest rates for about a year, the purpose of which is to fight against inflation, undeniably slowed economic activity and weakened the banks.
At present, the real fear is on the side of the second Swiss bank. Credit Suisse share price has unscrewed up to 1.56 Swiss francs, marking a new all-time low following an announcement published this morning and the effect of which was devastating.
The main shareholder of the Swiss bank, namely the Saudi National Bank, has declared that they are unable to provide additional financial assistance:
“We cannot because we would exceed 10% (in the capital). It’s a regulatory issue. »
The risk of contagion cannot be ruled out, but it should not have a disproportionate impact. Indeed, the situation of Credit Suisse has been known to many banking institutions for years. As a reminder, the stock is down nearly 98% since 2009. It has been several years since other European banks reduced their exposure to Credit Suisse.
The emergency doors are gradually closing for Credit Suisse. If the situation does not improve in the next few weeks, it seems that only the state can help him. A possibility that cannot be ruled out, as the bank plays an important role in the economy of its country.
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