2023-05-02 20:57:45
Dhe financial markets initially reacted calmly on Tuesday after another weekend during which a troubled bank was remedied. The emergency sale of the First Republic Bank to the largest US bank JP Morgan has been the third rescue operation for a US regional bank because of liquidity problems since the beginning of March. In addition, there is the takeover of Credit Suisse by the Swiss competitor UBS, which is secured by the Swiss government and is also justified with concerns about a dramatic withdrawal of deposits. In view of this history and new interest rate concerns, European bank stocks came under pressure on Tuesday. The European Stoxx bank index fell by 2.4 percent. Deutsche Bank shares fell 3.1 percent and Commerzbank 4.2 percent, but the price reaction was a long way from March 24, when Deutsche Bank shares fell as much as 15 percent.
Despite the relaxed reaction of investors to the fourth banking crisis within a very short time, a debate has broken out among supervisors and central bankers as to whether the equity and liquidity rules enacted after the 2008 financial crisis are still up to date. At Silicon Valley Bank, customers withdrew $42 billion in deposits in just five hours. The chief supervisor of the European Central Bank (ECB), Andrea Enria, spoke at a conference on Tuesday about the dark side of digitization. This enables the customers of a bank to escape very quickly. This increases the probability of damage, because banks that are in difficulty can very quickly be deprived of the basis for a sustainable business model. Such a speed of withdrawal of deposits has never existed before, Enria noted. He now thinks it is important to also investigate whether social media would have hastened the panicked flight.
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