Continued bleeding from global markets from the impact of the banking crisis. When will it stop?

Global markets are still on the brink, following fears of a rift in the global financial system, an exacerbation of the banking crisis and more bankruptcies.

A state of “bank panic” is rising in the United States after “Silicon Valley” and other banks went bankrupt, prompting many depositors to withdraw their money from banks, which may eventually lead to bankruptcy. bankruptcy of more banks and companies. and repeat the global financial crisis of 2008
The collapse of US banks has spooked markets, increasing pressure on weaker financial institutions that are already dealing with the unintended consequences of higher interest rates.

For his part, US President Joe Biden said that the banking crisis that followed the recent collapse of the “Silicon Valley” and “Signature” banks is receding.

Biden tried to reassure investors and depositors that the global banking system is “safe” after financial stocks lost billions of dollars in value since the collapse of the two midsize US banks last week. And earlier this week, Biden promised Americans that their deposits are safe.

Asked if the banking crisis has abated, Biden told reporters “yes.”

rescue plans

The First Republic was also on the brink of the abyss when customers withdrew their deposits

And US Treasury Secretary Janet Yellen and Jamie Dimon, CEO of JP Morgan, announced bailout plans, including an agreement with a group of US lenders to deposit tens of billions of dollars in cash in the “First Republic” to stop the bleeding. .

The Fed has provided almost $200 billion in support so far to guarantee all deposits in Silicon Valley and Signature Bank.

The Fed also approved record amounts of loans to other banks last week, totaling nearly $153 billion in recent days, surpassing the previous record of $112 billion set during the 2008 crisis.

The total amount that the Fed lent to the financial system is about half of what was provided during the global financial crisis.

In Europe, the Swiss Central Bank provided around $54 billion as an emergency loan to Credit Suisse to save it from default, after the bank’s share price fell 30% in trading last Wednesday.

financial world

Wall Street closed lower on Friday, at the end of a turbulent week dominated by an emerging crisis in the banking sector and signs of a possible recession.

All three major indices ended trading with heavy losses, with the financial services sector suffering the biggest losses among the major sectors in the Standard & Poor’s 500 index.

The Standard & Poor’s 500 Index closed down 43.81 points, or 1.10%, at 3,916.47 points, while the Nasdaq Composite Index fell 87.63 points, or 0.75%, to 11,629. .64 points.

The Dow Jones Industrial Average lost 386.71 points, or 1.20%, to 31,858.95 points.

The “Dow Jones” fell 0.16% for a week, with losses for the second week in a row, while the “Nasdaq” index rose 5.19% during the week, and the “Standard & Poor’s 500” index increased a 1.43% .

european stocks

And European stocks gave back early gains in Friday’s trading and posted their biggest weekly drop in five months, after support measures by US and European regulators failed to assuage fears of a global banking crisis.

The Stoxx 600 index closed down 1.3%, affected by the fall in the sub-indices of the banking, insurance and financial services sectors.

The banking sector index lost 2.6%, with shares of “HSBC”, “BNP Paribas”, “Allianz” and “UBS Group” falling between 1% and 3%.

The STOXX 600 index lost about 4% this week, and bank shares fell 11.5%, after the collapse of US and European banks raised investor concerns about the state of the financial sector.

dollar yield

The dollar fell in the session on Friday, with the continued fall in the shares of “Credit Suisse” and the bank “First Republic”, which raised the market’s concern about the transmission of the infection to other banks and increased fears of a recession due to the tightening of monetary policies.

The dollar index, which measures the performance of the US currency against six major currencies, fell 0.604% over the course of the week, the dollar index fell 0.99%.

Traders are awaiting the Federal Reserve’s two-day policy meeting, which is expected to result in a quarter percentage point hike in interest rates on March 22.

oil prices

While oil ended up trading lower in the session on Friday, giving up its early gains, which outpaced the dollar per barrel, as concerns about the banking sector led the two benchmarks to post their biggest weekly losses in months.

Brent crude futures fell $1.73, or 2.3%, to $72.97 a barrel to close, while US West Texas Intermediate crude lost $1.61, or 2.4%, at $66.74.

Both benchmarks fell by more than $3, reaching their lowest levels during the session. Brent lost about 12% over the week, posting the biggest weekly loss since December, according to Reuters

West Texas Intermediate crude futures have fallen 13% since last Friday’s close (March 10), posting their biggest weekly loss since last April.

“Fundamentals are not as bad as the market expects here, but there are concerns that oil is not as safe as it is for liquidity or gold,” said John Kilduff, a partner at Again Capital in New York.