Piazza Affari is in deep red on the collapse of bank shares triggered by Credit Suisse, after the main shareholder Saudi National Bank has excluded the possibility of providing financial support in case of further requests for liquidity. The Ftse Mib falls by 4.15% to 25,688.30 points. Unicredit sells 7.7%, Fineco 7.8%, Intesa Sanpaolo 7.06%, Banco Bpm 7% and Bper Banca 7.39%%. Even the European stock exchanges are in free fall, while the Silicon Valley Bank case still weighs. Of the main stock markets, Paris loses 3.60%, Amsterdam (-2.53%), Frankfurt (-2.97%) and Zurich (-2.14%) (here the trend in real time).
After the rebound on the eve, too Wall Street returns to fall at the start of the sessionweighed down by fears of systemic contagion from the bankruptcy of the SVB and after February retail sales were in line with estimates. About ten minutes after the start of trading on the US Stock Exchange, the indices are all down sharply. The Dow Jones Industrial fell 1.47%, the S&P 500 lost 1.58% and the Nasdaq fell 1.10%. Volatility remains very high, with the S&P 500 Vix at 27.05
Credit Suisse rolls over 20%
The collapse of Credit Suisse is due to the position of the largest shareholder Saudi National Bank. The Saudi bank will not “absolutely” support the bank by increasing its capital, its president Ammar al-Khudairy declared in an interview with Bloomberg TV. “We currently own 9.8% of the bank. If we go above 10%, a set of new rules will come into force” and “we are not inclined to enter a new regulatory regime,” al-Khudairy said.
Volani i credit default swap
The cost of insuring Crédit Suisse bonds against default in the near term is approaching levels that signal serious investor concern. THE credit default swap (i.e. the price of bankruptcy insurance, an instrument that hit the headlines during the subprime crisis in 2008) at one year were indicated at 835.9 points yesterday at the close, according to Bloomberg reports and are increasing further today , close to the 1,000 mark which indicates a high level of concern. The current level corresponds to 18 times the one-year CDS of UBS and about 9 times the equivalent of Deutsche Bank.
Waiting for the ECB
Government bond yields are down sharply as we look to the next ECB meeting. The spread between Btp and Bund rises to 192 points, with the yield on the Italian ten-year bond at 4.18% (-8 basis points). The crisis of two banks, Svb and Crédit Suisse, exploded on the eve of the meeting of the ECB which will decide on the new rate hike. While previously the markets took for granted a 0.5% increase (already announced by Christine Lagarde) now the extent of the increase is more uncertain in the light of fears of other banking crises, even if denied by institutional voices, also as regards the Italian institutes.
Sileoni (Fabi): “The Italian banking sector is one of the safest in the world”
«The Italian banking sector is one of the safest in the world. The banks in our country have very high liquidity ratios, equal to 160%, that is, they have additional liquidity, well beyond the minimums established by law and our supervision is always attentive. I feel like saying that we can rest assured», reassured the general secretary of Fabi, Lando Maria Sileoni, on the morning of 15 during the Radio Anch’io broadcast on Radio Rai Uno. “In any case, the Californian bank’s crisis is liquidity and it’s not an insolvency. There was a double problem: bank management and controls. It is therefore wrong to make catastrophisms or speak of contagion both in the United States and in the rest of the world ».
Gros-Pietro: “Svb case due to insufficient supervision”
«The Svb is an accident, a marginal case due to inefficient risk management and insufficient supervision. There are other emergencies to worry about: climate change and the war in Ukraine to name but two. These are the real problems and they require investments in one case, active policies in the other». Gian Maria Gros-Pietro, president of the Intesa San Paolo board of directors, said so in an interview with La Stampa, regarding the collapse of the Silicon Valley Bank. The bank’s bankruptcy “is above all the result of a political choice by Donald Trump – explains Gros Pietro – that of raising the threshold set for not significant banks, banks not strictly supervised. Silicon Valley Bank was among them. So it allowed itself a series of management errors that led to the crash ».
Orcel: “Liquid and well capitalized banks”
After last year’s strengthening process, European banks today “are stronger, are well capitalized and very liquid,” said UniCredit CEO Andrea Orcel during the Morgan Stanley European Financials Conference 2023. Orcel noted that the lenders of the Old Continent, due to negative interest rates “have overcome moments in which the core business was not profitable by concentrating on something else”. Now, «with rising rates we can see a better structural profitability». Also in light of what is happening in the USA with the bank alarm triggered by the Svb case, Orcel said he was “positive on the EU banking sector despite the uncertainties” that were created first with the war in Ukraine and then with the collapse of the two American institutes Silicon Valley Bank and Signature Bank, because the sector is able to face them. «Europe has always been obsessed with capital»he explained, referring to the stringent rules put in place by the ECB in recent years, which involve increases in capital levels from year to year and constant capital checks.
