FRANKFURT (dpa-AFX) – After the violent turbulence around U.S.banks in recent days, the situation on the financial markets calmed down on Tuesday.While bank shares such as those of Deutsche Bank and Commerzbank stabilized after sharp price losses, a recovery set in for government bonds.Germany’s leading index, the Dax, which had crashed on Monday, rose sharply to over 15,200 points, spurred by a slowdown in inflation in the United States.German Chancellor Olaf Scholz (SPD) made it clear that he saw no major threat to financial investments in Germany.
Further bad news about the collapsed Silicon Valley Bank was initially absent.The crypto market, which had collapsed due to the collapse of the cryptocurrency-focused bank Silvergate Capital, also recovered.Bitcoin rose to around $26,500, its highest level since mid-2022.
After turbulence in the US banking market, experts are now turning their attention to the major central banks, where interest rate decisions are due in a few days.Market participants are betting that the central banks will tighten their monetary policy in the fight against high inflation to a lesser extent than recently feared by investors.
California’s Silicon Valley Bank (SVB), which specializes in start-up financing, was closed on Friday after a failed emergency capital increase and placed under state control – as was Signature Bank from New York.
Silicon Valley Bank had invested a lot of money in the low-interest phase, for example in U.S.government bonds with long maturities, which lost value with the turnaround in interest rates.At the same time, customers withdrew a lot of money from the bank in a short period of time.
The collapse of Silicon Valley Bank sent shock waves through the financial markets and brought back memories of the global financial crisis, even though experts do not yet see any danger like that.In response to the bank’s collapse, the U.S.
government had announced a safeguard for all deposits at the financial institution.
The U.S.Federal Reserve (Fed) announced an internal review after mounting criticism in the wake of the largest U.S.banking collapse since the 2008 financial crisis.”The events surrounding Silicon Valley Bank call for a thorough, transparent, and expeditious investigation,” Fed Chairman Jerome Powell said Monday evening.
Chancellor Scholz said financial authorities responded clearly, sharply and quickly.
That shows “that this situation is being monitored very closely,” he said.”This is the best that can be done for the security of assets.To that extent, this is really no reason for anyone here in Germany to be very worried.” Scholz also stressed that significant progress has been made in financial supervision, as well as bank management, since the financial crisis of 2008 and 2009.”We have learned,” he said.
The collapse of Silicon Valley Bank will not cause problems in the eurozone, in the view of Greece’s central bank chief Giannis Stournaras.”We don’t see any impact of the SVB on eurozone banks, nor on Greek banks,” Stournaras told the daily Kathimerini (Tuesday).
The response of the U.S.authorities to secure the SVB’s deposits was quick and effective to avoid a possible panic, said Stournaras, who is a council member of the European Central Bank.
Meanwhile, savings banks in Germany do not see billion-dollar write-downs on securities holdings as a cause for concern.”At present, I am not aware of any savings bank that is in distress,” Helmut Schleweis, president of the German Savings Banks and Giro Association (DSGV), said Tuesday in Frankfurt.”The strength to bear such write-downs is present in the savings banks.”
Meanwhile, the German startup industry expressed optimism that the consequences of the collapse of Silicon Valley Bank for the local startup industry will be limited.”In origin, this is not a startup crisis.These are refinancing problems of a bank,” said Christian Miele, chairman of the German Startups Association.”I’m confident that there will be no major restraint among venture capitalists across the board.”
It is uncertain whether the major central banks will change their interest rate course as a result of the banking turmoil.
This Thursday, the European Central Bank (ECB) will decide on its monetary policy, followed in just over a week by the U.S.Federal Reserve.Just last week, statements by the Fed that it intended to raise key interest rates again in larger steps in view of stubborn inflation had unsettled investors.With the turbulence surrounding U.S.banks, interest rate expectations on the markets have fallen significantly.
A Fed rate hike of 0.5 percentage points, which was considered possible before the turmoil, currently seems hardly conceivable.A smaller hike or even a pause in interest rates is probably more realistic.Bank economists are not in agreement, however.
In February, high inflation in the USA eased.
Consumer prices rose by 6.0 percent compared to the same month last year, as the Labor Department announced on Tuesday in Washington.The development should be very good for the Fed right now, because the turmoil in the U.S.banking sector is a drag on further interest rate hikes.Some economists had recently accused the Fed of having raised the key interest rates too much – and thus to have conjured up the crisis around the SVB with./bgf/ben/axa/DP/jsl
© dpa-AFX 2023 Stocks mentioned in the article Change Last 1st jan.AUSTRALIAN DOLLAR / EURO (AUD/EUR) 0.12% 0.62117 -2.48% AUSTRALIAN DOLLAR / US DOLLAR (AUD/USD) 0.09% 0.66603 -2.64% AXA 0.60% 27.83 6.22% BITCOIN (BTC/EUR) 8.30% 22350 44.21% BITCOIN (BTC/USD) 9.13% 24205.8 45.70% BRITISH POUND / EURO (GBP/EUR) -0.13% 1.13323 0.07% BRITISH POUND / US DOLLAR (GBP/USD) -0.13% 1.21482 -0.17% CANADIAN DOLLAR / EURO (CAD/EUR) 0.48% 0.682031 -1.39% CANADIAN DOLLAR / US DOLLAR (CAD/USD) 0.45% 0.73111 -1.60% COMMERZBANK AG 4.62% 10.425 12.72% DAX 1.84% 15236.58 7.44% EURO / US DOLLAR (EUR/USD) -0.02% 1.07196 -0.20% INDIAN RUPEE / EURO (INR/EUR) 0.22% 0.011335 1.44% INDIAN RUPEE / US DOLLAR (INR/USD) 0.19% 0.012157 0.96% NEW ZEALAND DOLLAR / US DOLLAR (NZD/USD) 0.09% 0.62191 -2.97% SIGNATURE BANK -22.87% 70 0.00% SILVERGATE CAPITAL CORPORATION -2.31% 2.33 -86.32% SVB FINANCIAL GROUP -60.41% 106.04 0.00% US DOLLAR / EURO (USD/EUR) 0.02% 0.932888 0.20%.
