So far, so good… – The words of the leaders of the Silicon Valley Bank want to be reassuring, but the situation seems very tense. After the losses of the last few hours, the entire American financial sector is shaking and the contagion is spreading to Europe this morning. After the setbacks of Silvergate Bank, are we on the verge of a new catastrophe? Beginning of response.
A black Wednesday for one of the largest American banks
Wednesday, March 8 in the American evening, the Silicon Valley Bank (SVB) has announcement that because of a lack of cash it had to carry out a massive sale of assets. So she separated from 21 billion dollars of bonds and US treasury bills by cashing in on the way a $1.8 billion loss.
The bank also said it had raised 500 million dollars from the venture capital firm General Atlantic. But that’s not enough and she’s now looking to sell 1.75 billion additional dollars worth of stock to bail out.
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Is the worst over? Not so sure…
The reaction on the markets did not drag on since the share price of the SVB fell by 60% erasing 80 billion capitalization in a few hours. But the contagion has also won the others major american banksof which JP Morgan, Bank of America, Wells Fargo, Citi, who between them lost nearly 52 billion in capitalizations as well.
And now ? Greg Beckerthe CEO of the SVB, wanted to be reassuring while being aware of the seriousness of the situation. He specifically asks investors to remain calm stating that the bank was sufficiently capitalized. His only fear?
“If everyone thinks that SVB is in difficulty, it would be complicated. »
Basically, he fears a bank run which would see clients seek to withdraw their holdings en masse. Moreover, several major players in American finance have also made a point of sustain the bank and urged their customers not to panic.
This morning theStoxx 600 index of banks fell by 4.39%BNP Paribas of 4.7%Societe Generale de 5.6% and Crédit Agricole also lost 3.8%. A great concern reigns today on the financial markets and the hours which come could be decisive. As for Bitcoin, it is also affected and had a bad night under $20,000.
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