The global financial sector lost $465 billion after the bankruptcy of SVB
The capitalization of the global financial sector for two days after the bankruptcy of the U.S. bank Silicon Valley Bank (SVB) decreased by $465 billion.
Regional U.S. banks were hit the hardest. The KBW Regional Banking Index fell 7.7%, the steepest drop since June 2020. The MSCI Asia Pacific composite index fell 3.1 percent. Shares of Japanese bank holding company Mitsubishi UFJ fell 8.6%, South Korea’s Hana Financial Group fell 3.9% and Australia’s ANZ Group Holdings fell 1.5%.
According to John Woods, chief executive of Credit Suisse Group in Asia-Pacific, financial markets at the moment are “walking on thin ice”. Because of the turmoil in the banking industry, the U.S. Federal Reserve (Fed) will “take a pause” to work through monetary policy, he believes.
On March 10, the California Department of Financial Protection announced the bankruptcy of SVB, the 16th largest bank in the U.S. One of Silicon Valley’s leading corporate lenders went bankrupt in less than two days. It served mainly workers in the technology sector and companies financed with venture capital. It was the largest bankruptcy in the U.S. since the 2008 financial crisis. Signature Bank was closed on March 12 by the New York State Banking Authority.
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