Silicon Valley Bank´s collapse triggers domino effect on US banks

London, Mar 13 (Prensa Latina) Shares of markets, global banks as well as crude oil prices are presently trading down despite measures taken by the United States so as to guarantee deposits from the Silicon Valley Bank´s collapse.

March 13, 2023
15:13

Europe’s STOXX banking index dropped 5.8%, shedding 3.78% on Friday’s trading, to total a two-day loss of 9.58%, the biggest decline since March 2022, shortly after the Ukraine conflict broke out.

Added to this, it was reported losses of up to 12.7% at Commerzbank AG, while Credit Suisse Group AG briefly hit a new all-time drop after plummeting over 15%.

Regarding U.S. banking, there were also negative fallouts, as Bank of America losing 3.7% in pre-market trading.

Smaller lenders such as First Republic Bank remained under pressure with around 60% declines, and PacWest downed around 40%.

Silicon Valley Bank has been the largest bank failure since 2008 by collapsing when most of technology and other venture capital-backed users drew out their dividends.

Such a situation triggered high levels of uncertainty forcing bank regulators to take possession of Silicon Valley Bank and to appoint the Federal Deposit Insurance Corporation as receiver.

Earlier, Treasury Secretary Janet Yellen stated that a bailout for Silicon Valley Bank had been ruled out for the time being and stressed the U.S. economy depends on safe and sound banking system.

However, ahead of multiple uncertainties, the U.S. Government on Monday announced a number of measures allowing all Silicon Valley Bank customers to have access to their deposits as of this Monday.

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