The air is heavy on all the main European lists, in the wake of the trend of the last few days of the US markets. TO Business Square il FTSE MIB is declining by 2,14%, and things are no better in the rest of Europe, with all the main markets in clearly negative territory. Behind the nervousness of the operators there seem to be tensions related to very strong swings recorded in the last week on the US financial markets, driven by the collapse of Silvergate Capitalbank operating in the cryptocurrency sector of which the holding of reference, the Silvergate Capital Corporation, announced the closure in the last few hours. There holding he assured that the bank’s closure and liquidation plan «includes the full refund of all deposits.
The collapse of Silicon Valley Bank
A reassurance that was not enough for the markets, also due to another disturbing coincidence: the group SVB is for saleas reported by CNBC. According to sources consulted by the newspaper, the bank’s attempts to raise capital to offset the losses suffered on the bonds have failed. The group would therefore have hired consultants to evaluate a potential sale. In today’s session, the bank’s shares were down by 62%e Silicon Valley Bank, which specializes in financing in the tech and start-up world, has been suspended from trading on Wall Street pending further communications. In yesterday’s session, however, the shares had touched the -60%following the group’s announcement that it would raise more than $2.25 billion capital to offset losses related to the sale of bonds to raise cash to repay investors.
The monetary and macroeconomic framework
The trend on the stock market of the two financial groups had negative repercussions on the major banks including JpMorgan (-5.4%), Bank of America (-6.2%), Morgan Stanley (-3.8%) and Goldman Sachs (-2%). These losses were also influenced by the words of the president of the Federal Reserve, Jerome Powellon the possibility of further raising i interest rates compared to previous forecasts. And today the February monthly report relating to the was published job market American. The latest employment data turn out to be much better than expected. According to the report, in February 2023, employed persons in the US – excluding workers in the agricultural sector – increased by more than 310 thousand units. A discretely higher number than the estimates of analysts, who expected an increase of 225 miles jobs. Meanwhile, January employment data was revised downwards, moving from 517 miles a 504mila. The increase in wages recorded in February is instead below forecasts. The average hourly wage has risen by 0.24 percent (slightly more than half compared to the estimates which envisaged an increase in the 0.4 percent). Currently, therefore, the average hourly wage in the United States is $33.09. The unemployment rate is also on the rise, from 3.4 percent al 3.6 percent.
What are the banks at risk?
As reported by Bloomberg«the immediate risk for many banks may not be existential, but still painful. Rather than face a rush on deposits, banks will be forced to compete harder for (deposits) by offering higher interest payments to savers. This aspect would erode what banks earn on loans. To suffer the greatest impact, however, would be the medium and small banksin which financing is less diversified and therefore could suffer pressure and therefore more substantial losses”. Micheal Barrvice chairman of the Federal Reserve, observed in a speech that after the 2008 crisis, regulators invested more resources in ensuring the stability of large banking institutions, prompting banks to increase the reserve capital so that we can be prepared for any market shocks. At the same time, however, the supervision of smaller banking institutions has been “neglected”. And it is precisely for this reason that there are fears for the possible effects in smaller financial and banking realities, while the markets fear a “domino effect” in the withdrawal of investments.