Financial markets around the world have lost about $465 billion over two days amid volatility associated with the closure of several banks in the United States, including Silicon Valley Bank (SVB), Bloomberg reported on Tuesday
MOSCOW (Pakistan Point News / Sputnik - 14th March, 2023) Financial markets around the world have lost about $465 billion over two days amid volatility associated with the closure of several banks in the United States, including Silicon Valley Bank (SVB), Bloomberg reported on Tuesday.
The combined market value of companies on the MSCI World Financials Index and the MSCI EM Financials Index fell about $465 billion over Friday and Monday, the report read. The 7.7% drop in the KBW Regional Banking Index, the steepest fall since June 2020, hit US regional banks the hardest, according to the report.
"Once we move away from initial shock, rather than painting everyone with the same brush there is a tendency to scrutinize the models a bit more, the banks' deposit bases and access to liquidity," Gary Schlossberg, global strategist at Wells Fargo Investment Institute, said, as quoted by the news outlet.
The expert also noted that there was no delay on the part of authorities, and further measures to address the situation could follow, according to the report.
On March 10, Californian regulators shut down Silicon Valley Bank (SVB), which became the largest US bank to collapse since the 2008 financial crisis. SVB's collapse is believed to be linked to the increase in interest rates by the Federal Reserve System, which caused the impairment of assets on the balance sheets of many financial institutions, and to poor risk management. On March 12, authorities closed New York-based Signature Bank because of systemic risks, which became the third largest bank failure in US history. US authorities have announced support measures.
