European stock exchanges rebound and close sharply higher after the ECB
The European stock markets close sharply higher after yesterday’s crash. Frankfurt gained 1.63%, London 0.90%, Paris 2.03% and Milan on 1.38. The markets have interpreted the decisions of the ECB in a “dovish” (dove) sense, which it raised rates by half a point as expected but did not provide precise indications on future moves. She also intervened to reassure investors the decision of the Swiss central bank to provide Credit Suisse with a loan of up to 50 billion Swiss francs (approximately €50.6 billion) as part of a Covered Loan Facility and a short-term liquidity facility, fully backed by high quality assets. The securities of the Swiss institute, which plunged yesterday to their all-time low, marked a leap of more than 18%.
Reached by affaritaliani.itDeputy Prime Minister and Foreign Minister Antonio Tajani stated that “This is not the time to keep raising interest rates. I share the critical position of the governor of the Bank of Italy Visco and the president of ABI Patuelli. In Europe, the increase in the cost of money is damaging families and businesses”.
Meanwhile, on the other side of the ocean, in the United States, a new alarm is coming Lehman Brothers. Il American banking system is still in flux, after the failure of three banks in the last week. The actions of the First Republic, the San Francisco-based regional bank, fell 34%. Jp Morgan, Morgan Stanley and several other major US banks are discussing a potential transaction with First Republic Bank which could include a significant capital injection in order to strengthen the US institution, which has come under the market’s sights due to its fragility. This was reported by Bloomberg, after the WSJ was the first to break the news.
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