Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

Markets still uncertain after SVB and Credit Suisse shocks

Markets still uncertain after SVB and Credit Suisse shocks

Concerns abound as the FTSE is on course to be down in the week overall and questions swirl around strategically important banks rescuing First Republic Bank.
A tumultuous week in the markets ended on an uncertain note - suggesting fears remain after large losses from the collapse of Silicon Valley Bank.

The FTSE 100 (Financial Times Stock Exchange) index of the most valued companies on the London Stock Exchange started the day at around the 7,500 mark - better than all of Thursday and most of Wednesday and a 1% increase - but the early morning gains had worn off by the close.

The most widely followed index of European stocks, the STOXX 600, had similar results and started the day up 0.8%, also better than Thursday and most of Wednesday, but lost all gains by end of day.

It followed the close on Thursday night of Asian markets, including Tokyo's Nikkei and China's Shanghai Composite, in positive territory.

The activity came after a group of 11 major banks provided $30bn (£24.7bn) of cash in an effort to end the crisis of confidence around First Republic, a regional US lender.

The bank has seen its share price collapse about 75% amid sector-wide balance sheet scrutiny following the collapse of Silicon Valley Bank (SVB) last Friday.

That collapse brought about a turbulent start to the week as the FTSE 100 was dragged down 2.2%, more than last Friday's 1.7% fall from when SVB news came through.

But the move did not reassure markets, as on Friday afternoon there was a more than 20% fall in share value.

Credit Suisse concerns

On top of the Silicon Valley Bank collapse, the troubles of Credit Suisse also led to investor jitters this week.

Credit Suisse, Switzerland's second-largest bank, has now been hit by a US investors lawsuit, over accusations the bank concealed its troubles.

It announced on Wednesday it had found "material weaknesses" in its financial reporting processes for 2021 and 2022.

Its shareholder, Saudi National Bank, said it would not provide any further financial assistance causing the value of the bank to fall by 30%.

The Swiss central bank stepped in to provide funding of 50bn Swiss francs (£44.5bn), which was welcomed by Chancellor Jeremy Hunt.

Now the bank is being sued by US investors who claim the lender made "materially false and misleading statements" in its 2021 annual report.

'We are not out of the woods'

Analysts have cautioned the difficulties are not over.

"We are not out of the woods," the chief market analyst at financial services company Finalto said.

The FTSE 100 is on course to be 3% down in the week overall and there is concern over the involvement of large banks in supporting First Republic Bank (FRB).

"Spreading the risk of financial contagion to achieve a false sense of confidence in FRB is bad policy," billionaire investor Bill Ackman said.

"The [strategically important banks] would never have made this low return investment in deposits unless they were pressured to do so and without assurances that FRB deposits would be backstopped if it failed.

"The market has responded to this fictional vote of confidence with a 35% after-market decline in FRB stock."
AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
Elon Musk Unveils Grokipedia: An AI-Driven Alternative to Wikipedia
Russia’s President Putin Declares Burevestnik Nuclear Cruise Missile Ready for Deployment
US Administration Under President Donald Trump Reportedly Lifts Ban on Ukraine’s Use of Storm Shadow Missiles Against Russia
White House Announces No Imminent Summit Between Trump and Putin
China Presses Netherlands to “properly” Resolve the Nexperia Seizure as Supply Chain Risks Grow
Merz Attacks Migrants, Sparks Uproar, and Refuses to Apologize: “Ask Your Daughters”
Apple Challenges EU Digital Markets Act Crackdown in Landmark Court Battle
Shouting Match at the White House: 'Trump Cursed, Threw Maps, and Told Zelensky – "Putin Will Destroy You"'
‘No Kings’ Protests Inflate Numbers — But History Shows Nations Collapse Without Strong Executive Power
"The Tsunami Is Coming, and It’s Massive": The World’s Richest Man Unveils a New AI Vision
EU Moves to Use Frozen Russian Assets to Buy U.S. Weapons for Ukraine
Europe Emerges as the Biggest Casualty in U.S.-China Rare Earth Rivalry
“Firepower” Promised for Ukraine as NATO Ministers Meet — But U.S. Tomahawks Remain Undecided
The Sydney Sweeney and Jeans Storm: “The Outcome Surpassed Our Wildest Dreams”
Dutch Government Seizes Chipmaker After U.S. Presses for Removal of Chinese CEO
AI and Cybersecurity at Forefront as GITEX Global 2025 Kicks Off in Dubai
Ex-Microsoft Engineer Confirms Famous Windows XP Key Was Leaked Corporate License, Not a Hack
Hungarian Prime Minister Viktor Orbán stated that Hungary will not adopt the euro because the European Union is falling apart.
Mayor in western Germany in intensive care after stabbing
Australian government pays Deloitte nearly half a million dollars for a report built on fabricated quotes, fake citations, and AI-generated nonsense.
BYD’s UK Sales Soar Nearly Nine-Fold, Making Britain Its Biggest Market Outside China
Latvia to Bar Tourist and Occasional Buses to Russia and Belarus Until 2026
Wave of Complaints Against Apple Over iPhone 17 Pro’s Scratch Sensitivity
Munich Airport Reopens After Second Drone Shutdown
Pro Europe and Anti-War Babiš Poised to Return to Power After Czech Parliamentary Vote
Sean ‘Diddy’ Combs Sentenced to Fifty Months in Prison Following Prostitution Conviction
Altman Says GPT-5 Already Outpaces Him, Warns AI Could Automate 40% of Work
Russian Research Vessel 'Yantar' Tracked Mapping Europe’s Subsea Cables, Raising Security Alarms
Global Cruise Industry Posts Dramatic Comeback with 34.6 Million Passengers in 2024
U.S. Demands Brussels Scrutinize Digital Rules to Prevent Bias Against American Tech
Private Equity’s Fundraising Surge Triggers Concern of European Market Shake-Out
Tokyo’s Jimbōchō Named World’s Coolest Neighbourhood for 2025
European Officials Fear Trump May Shift Blame for Ukraine War onto EU
The Personality Rights Challenge in India’s AI Era
Italy Considers Freezing Retirement Age at 67 to Avert Scheduled Hike
Italian City to Impose Tax on Visiting Dogs Starting in 2026
Study Finds No Safe Level of Alcohol for Dementia Risk
Trump Says Ukraine Can Fully Restore Borders with NATO Backing
Europe Signals Stronger Support for Taiwan at Major Taipei Defence Show
Germany Weighs Excluding France from Key European Fighter Jet Programme
Cyberattack Disrupts Check-in and Boarding Systems at Major European Airports
Björn Borg Breaks Silence: Memoir Reveals Addiction, Shame and Cancer Battle
When Extremism Hijacks Idealism: How the Baader-Meinhof Gang Emerged and Fell
JWST Data Brings TRAPPIST-1e Closer to Earth-Like Habitability
Trump Orders $100,000 Fee on H-1B Visas and Launches ‘Gold Card’ Immigration Pathway
France’s Looming Budget Crisis and Political Fracture Raise Fears of Becoming Europe’s “Sick Man”
Three Russian MiG-31 Jets Breach Estonian Airspace in ‘Unprecedentedly Brazen’ NATO Incident
European manufacturers against ban on polluting cars: "The industry may collapse"
Turkish car manufacturer Togg Enters German Market with 5-Star Electric Sedan and SUV to Challenge European EV Brands
Christian Brueckner Released from German Prison after Serving Unrelated Sentence
×