Banks Worldwide Lose Close To $500 Billion In Market Rout Post-SVB Crisis

Banks Worldwide Lose Close To $500 Billion In Market Rout Post-SVB Crisis

by Swarajya Staff - Mar 18, 2023 11:39 AM +05:30 IST
Banks Worldwide Lose Close To $500 Billion In Market Rout Post-SVB CrisisThe collapse of SVB big blow to global banking stocks.

Bank shares globally have lost almost $500 billion, marking the largest decline for the financial sector since the Covid-19 pandemic began.

The recent downfall of Silicon Valley Bank heavily impacted financial stocks this week causing a significant decrease in market value for banks in the US, Europe and Japan. Losses have reached $459 billion, marking the sharpest decline since March 2020.

March saw major losses for banks worldwide, with US's KBW Bank down 18 per cent, Europe's Stoxx 600 banks down 15per cent, and Japan's Topix banking sector down 9 per cent.

Although Wall Street banks, including JPMorgan Chase and Goldman Sachs, provided $30 billion to stabilise California's First Republic bank, their efforts to prevent panic and stabilise the overall financial system were not entirely effective. The bank's shares decreased by 25 per cent during Friday's afternoon trading.

Despite receiving a $54 billion emergency credit line from the Swiss central bank, Credit Suisse's shares dropped by 8 per cent, with its credit default swaps and bonds being traded at distressed levels in Zurich.

Volatility has hit even the stronger banks, as the yield on the two-year Treasury note falls at its fastest pace since 1987.

Goldman Sachs lost $200 million in its trading desk dealing in interest rate products due to market fluctuations. The bank made no comments on the matter.

Regulators discussed methods to ease concerns about the financial system, particularly stabilising Credit Suisse and its global subsidiaries, in a meeting on Friday evening.

The future of 167-year-old Swiss bank is under debate by its executives and board members, as the institution has faced consecutive crises.

The bank is exploring various options, such as splitting up the company, conducting a public offering of its Swiss division, and selling its wealth and asset management units.

These moves would likely result in a transfer of ownership to UBS, as the government and regulators prefer the bank to remain under Swiss control.

Get Swarajya in your inbox everyday. Subscribe here.

An Appeal...

Dear Reader,

As you are no doubt aware, Swarajya is a media product that is directly dependent on support from its readers in the form of subscriptions. We do not have the muscle and backing of a large media conglomerate nor are we playing for the large advertisement sweep-stake.

Our business model is you and your subscription. And in challenging times like these, we need your support now more than ever.

We deliver over 10 - 15 high quality articles with expert insights and views. From 7AM in the morning to 10PM late night we operate to ensure you, the reader, get to see what is just right.

Becoming a Patron or a subscriber for as little as Rs 1200/year is the best way you can support our efforts.

Become A Patron
Become A Subscriber
Comments ↓
Get Swarajya in your inbox everyday. Subscribe here.

Latest Articles

    Artboard 4Created with Sketch.