European markets fall as Silicon Valley bank collapses
Date
3/14/2023 3:35:19 AM
(MENAFN) The collapse of Silicon Valley bank (SVB) last week had a significant impact on global markets, causing European Stocks to drop on Monday. The Pan-European Stoxx 600 index fell by 2.56 percent at 13:00 GMT, with all major stocks trading in the red. Bank stocks were among the hardest hit, with Commerzbank, BAWAG Group, and Banco BPM all experiencing losses of more than 6%. Meanwhile, Credit Suisse saw a dramatic plunge of 15 percent in early trading, while UniCredit lost 9 percent, and Deutsche Bank and Raiffeisen Bank both declined by 7 percent.
The collapse of SVB occurred following a bank run, which caused its stock to plummet and ultimately led to its assets being seized. This event has led to concerns about the potential for similar crises in the future, as well as the stability of the banking industry as a whole.
Despite the dire situation, there was some good news in the form of Britain's HSBC. One of the world's largest banks, HSBC agreed to rescue the UK branch of SVB for a symbolic pound1, vowing to protect client deposits as part of the deal. However, this news did not prevent HSBC's shares from dropping 3.5 percent following the announcement.
The fallout from the SVB collapse and the wider economic implications of the banking industry's instability are likely to be felt for some time. Investors will be watching closely for any signs of further instability, while policymakers may be forced to consider new regulations or other measures to prevent future bank runs and systemic crises.
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