The 50 billion franc lifesaver launched by the Swiss Central Bank buffers the emergency and gives time but that does not solve the problems of the institution which must first of all stem the exodus of deposits. On Wall Street, the shares of First Republic lose 23% despite yesterday a consortium of 11 banks led by Jp Morgan agreed for a support of 30 billion dollars. Funds may not be enough
Credit Suisse sinks again in the stock market. Stocks are back below the two francs, down 10%. After Wednesday’s collapse, the Swiss bank had partially recovered the fall by climbing 17% following the announcement by the Swiss central bank that it was making available a liquidity facility for 50 billion francs. A lifesaver that stops the emergency and frees up time but doesn’t solve the problems of the bank which must first of all stem the exodus of deposits. Yesterday Credit Suisse and the other Swiss giant Ubs (- 2.3%) they were against one merger pushed by the Swiss authorities and government. UBS said it would like to continue its standalone strategy and would be reluctant to take on Credit Suisse-related risks. Which, in turn, would like to continue alone in its restructuring plan. In the wake of the collapse of the Swiss banks, sharp declines have been recorded in the entire sector. France’s Bnp Paribas and Société Générale are down 4.5 and 3% respectively. The German Deutsche Bank and Commerzbank by 3% and del 4.6%. Intesa Sanpaolo in Milan down 2.6% while Unicredit drops by 4.4%.
TO Wall Street the actions of First Republic lose on the 23rd% despite yesterday a consortium of 11 banks led by Jp Morgan has agreed for a support of 30 billion dollars. Funds may not be enough. In recent days, small US banks have borrowed $164 billion from the Fed, surpassing a 2008 record of $111 billion. Svb started the bankruptcy procedure today which gives the institute more time for an orderly disposal of the assets. Jp Morgan drops 3.3%Bank of America by 3.8%Wells Fargo by 4%.
The OECD today ruled out any risk of “systemic crisis” after the failure of Silicon Valley Bank. “We are in a very different situation from 2008,” said the chief economist, Alvaro Pereira. “We have stronger regulation, central banks and regulators have learned from previous crises, and most of the world’s banks are well capitalized.” Even if “we may witness episodes of turbulence, we do not consider” the bankruptcy of the US bank “as a systemic risk at the present time”. As for the Credit Suisse “The Swiss authorities reacted very quickly to limit the risk of contagion.”