“Ultimately, central bankers and policymakers need to bolster faith by stopping runs on deposits, boosting asset prices (especially for the government bonds owned by banks) and get credit flowing again so that the banking crisis does not spill over into the real economy and provoke a deep recession."īut, Mould questioned: “How? We have been here before, in 2007-09 worldwide and then in the EU during the 2010s when interest rate cuts and Quantitative Easing were the main tools and, perhaps, we are due for a repeat performance. Investors could be forgiven for thinking what is coming next, as bank share prices slide and regulators and central bankers alike continue to assert that there is enough liquidity out there, only for them to offer more (and more) of it as it seemingly disappears,” said Mould.
“Silvergate, Silicon Valley Bank and Signature Bank have failed, First Republic Bank has suffered a run leading to liquidity support from other lenders and Credit Suisse has fallen into the arms of bitter rival UBS. 3.55pm: Banking on itĬonfidence remains fragile in the market after bank runs, despite policymakers’ provision of liquidity, noted AJ Bell investment director Russ Mould, and if the latest moves fail to calm markets, odds on a recession and need to pivot to rate cuts and QE would grow “And after the ECB last week, investors seem relaxed about the prospect of a 25bps hike from the Fed this week, though they will hope for some fairly dovish commentary to go with it.”Īt the UK close, US stocks were mixed, with the Dow Jones Industrial Average trading 0.9% higher at 32,132 and the S&P 500 gaining 0.5% to 3,935. “Ultimately, while it is a shock to see a global bank disappear so quickly, it is reassuring to see governments and regulators moving quickly to seal off any source of further contagion,” he added. “What began as a very ‘sea of red’ kind of day has turned into a rebound, with stocks clawing back losses,” Beauchamp said.
0 kommentar(er)
