This article was last updated on March 18, 2023
Bank shares fall again
Despite major interventions in the US and Europe, investors remain unconvinced of a positive outcome at the end of a hectic week that saw several US banks collapse. Even today, bank shares, in particular, are under pressure.
In an effort to prevent a domino effect after Silicon Valley Bank and Signature Bank, the American First Republic Bank (FRB) received a capital injection of more than $30 billion. Similarly, Credit Suisse was granted a significant loan by the Swiss Central Bank to survive.
The question remains whether these actions have prevented a domino effect, or if investors’ concerns are justified. Although investors are pleased with the direct and firm response, financial markets remained unsettled on Friday, indicating that nervousness persists.
The importance of consumer confidence in banks cannot be overstated, and no matter how much extra support a bank receives, everything ultimately depends on customers’ trust. Therefore, it is difficult to predict when peace will return to the banking world.