European markets had opened close to balance on Monday morning. Pavel Bobrovskiy / stock.adobe.com
Investors remain under pressure, despite the measures taken by the American authorities to restore confidence in the American banking sector. The BNP Paribas share fell by 6.34%, that of Santander by 7.48%.
European stock markets fell sharply on Monday, again won by concerns about the risks of contagion in the global banking sector after bankruptcies in the United States in recent days.
European markets opened close to balance after the announcement of exceptional measures in the American markets but then stalled: Paris fell by 2.33%, Frankfurt by 2.41%, after losing more than 3%, and London by 2.01% around 09:50 GMT (10:50 a.m. in Paris). Milan even falls by 4.18%. In Asia, the Tokyo Stock Exchange lost 1.11% but Shanghai gained 1.20% and Hong Kong 1.95%. “We had forgotten how much the banking system relies on trustsays Lionel Melka, partner at Swann Capital.
Confidence in US regional banks appears shattered after three bankruptcies in recent days, including that of Silicon Valley Bank. “Only big banks seem safe“, he continues. The US authorities took several measures over the weekend to try to stem mistrust in the US banking system and avoid massive withdrawals of deposits that could further weaken these institutions. Among the measures announced on Sunday, the authorities will in particular guarantee the withdrawal of all deposits from the bankrupt bank Silicon Valley Bank (SVB).
Read alsoThe Tokyo Stock Exchange shocked by the bankruptcy of the American bank SVB
Bright red sitting news for banks
The US Federal Reserve (Fed) has also agreed to lend the necessary funds to other banks that may need them to honor withdrawal requests from their customers. “It’s not a federal bailout but it provides guarantees” to allow “find buyers quickly“, explains Alexandre Baradez, analyst of IG. He emphasizes the existence ofa stressful phaseon the markets even if the situation remains, according to him, far from 2007.
On Friday, European banks fell again on Monday, with an even more marked movement for banks perceived as less solid: Crédit Suisse 9.90% hit a new historic low point and Commerzbank fell 12% while BNP Paribas dropped 5 29% and Societe Generale 5%. HSBC, which lost 3.58%, announced Monday morning to buy the British branch of Silicon Valley Bank for one pound, which allows customers to “access their deposits and banking services normally».
Read alsoBankruptcy of SVB: the American authorities want to put an end to the bank panic
New deal for the Fed?
This crisis in the banking sectorgame changer on Fed expectations», underlines Ipek Ozkardeskaya, of Swissquote Bank. The sharp rises in interest rates over the past year in order to fight inflation have contributed to weakening the banks and slowing down economic activity. The latest events could convince US central bankers to slow down at their next meeting on March 21-22. While the majority of investors were considering a return to a sharp rise in key rates, of 0.5 percentage point, this option now seems to have been ruled out.
Sovereign rates fell in the bond market on Monday. The interest rate for the 10-year US loan is 3.50%, against 3.70 on Friday at the close, while the German rate at the same maturity is trading at 2.21% against 2.50% on Friday at fence. The dollar retreats against other currencies. Around 10:10 a.m. GMT (11:10 a.m. in Paris), the greenback fell 0.32% to 1.0677 dollars for one euro after falling to 1.0737 dollars, a level not seen for a month. The American currency also lost 0.41% to 1.2079 dollars for one pound. Bitcoin rebounded 2.43% to $22,010, erasing much of the losses that followed news of SVB’s struggles.
Read alsoBankruptcy of SVB: what are the risks for European markets?
“No threat” for France and Germany
US President Joe Biden, he said to himself “determined to hold accountable those responsible for this mess“. Joe Biden assured that “the American people and American businesses (could) trust that their bank deposits will be there when they need them“. At the same time, the American authorities put SVB up for auction with the aim of finding a buyer as soon as possible.
The race against time this weekend recalls September 13 and 14, 2008. The American authorities had failed to find a buyer for Lehman Brothers and refused to intervene, pushing the bank to file for bankruptcy, with dramatic consequences for the sector. finance and the global economy as a whole.
In Germany, the banking supervisor Bafin assured Monday that the bankruptcy of SVB does not constitute “not a threat to financial stability” from the country. French Economy Minister Bruno Le Maire also said French banks were not in danger. “I don’t see any risk of contagion“, he said.
French banksare not exposed to a single industryLike the SVB, which was almost exclusively exposed to the new technologies sector, he underlined Bruno Le Maire.
TO HAVE ALSO – Bankruptcy of SVB: “There is no specific alert” in France, reassures Bruno Le Maire