If investors can find any time away from looking at the banking turmoil, the US Federal Reserve will announce its decision around interest rates on Wednesday.Įxpectations are swinging wildly as the events at Silicon Valley Bank and Credit Suisse have thrown in a curveball. It will be impossible for markets to ignore the banking turmoil on both sides of the continent and with a lot of doubts about Credit Suisse and the exposure of other banks to the Silicon Valley crash, banking stocks are set to be under pressure next week. Photo: UPI/Alamy Live NewsĪs we approach the end of “one of the more fraught weeks in financial markets since the GFC”, as Jim Reid from Deutsche Bank puts it, markets can’t say it is all over now. Investors will wait to hear from Jerome Powell on Fed rates and from Andrew Bailey a day later on interest rates in the UK. Read more: FTSE 100: Markets on the defensive as US banks deposit $30bn to rescue First RepublicĪfter the failure of two US banks in the past week – Silicon Valley Bank and Signature Bank – investors have been worried that other banks could also collapse. First Republic ( FRC)įirst Republic, a regional US lender, was among those to have seen its share price collapse this week amid sector-wide balance sheet scrutiny prompted by the collapse of Silicon Valley Bank ( SIVB) last Friday.Ī group of 11 major banks clubbed together to provide $30bn (£24.7bn) of cash in an attempt to end a crisis of confidence surrounding the the nation's 14th-largest bank. Meanwhile, US investors in Credit Suisse have hit the beleaguered Swiss bank with legal action, claiming that it overstated its prospects before this week’s shares crash. “Whether depositors are sufficiently reassured to stem outflows over the next few days is a key question, in our view,” Frédérique Carrier, head of investment strategy in the British Isles at RBC Wealth Management, said.
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