When banks start to fail the global markets sit up and take notice. When the Silicon Valley Bank (SVB) collapsed many in the financial sectors reckoned it was a small, provincial type matter - an “idiosyncratic” failure so to speak. The UK operation of SVB was bought for £1 by HSBC.
A few days later, Credit Suisse - an absolute giant of a bank suffered a bout of extreme collywobbles and needed state assistance to stay up.
Credit Suisse is regarded as a G-Sib in the financial sphere - a globally systemically important bank - with deposits and investments of $575 billion worth. As Stalker writes, the latest report was rival Swiss bank UBS was offering to buy Credit Suisse for $1 billion - an offer likely not to cut the mustard, so to speak.
(Subsequently the UBS deal to buy Credit Suisse went through at $3.25 billion.)
Next back across to the US and the First Republic gets a “dig out” from authorities. ‘Tis most assuredly a skittish time on world markets and in the banking sector at the moment. Contagion is the fear.
Let’s hope by the time you read this, that nothing more systemic has happened. Like the weather, it will affect us all.
