Silicon Valley Bank fallout shifts focus to Europe, causing FTSE 100 to lose £75bn

The ongoing fallout caused by the collapse of lending firm, Greensill Capital, has reverberated through to the FTSE 100, causing the UK’s leading index to lose £75bn in value. The situation has now escalated to the level where regulators are scrutinising both the practices of the bank and its largest shareholder, Softbank, which has been accused of exerting undue influence. With the EU emerging as a central focus of the fallout, many questions are being raised about the wider implications that this issue may have on the global banking industry.


The FTSE 100 and other European stocks have suffered losses due to concerns over the financial health of a major European lender and the potential impact of another interest rate hike on banks in the Eurozone. The top shareholder of Credit Suisse stated it could not offer the bank further financial support, resulting in a sharp drop in the bank’s share price and wider implications for financial stocks. Swiss banks have faced greater scrutiny since the collapse of Silicon Valley Bank last week, prompting investor focus on lenders’ ability to manage their debts. Rumours of an interest rate hike by the European Central Bank also contributed to market uncertainty. However, the probability of this occurring had dropped to 20% by late Wednesday afternoon. London’s FTSE 100 lost £75bn in market value by close. Credit Suisse shares ended the day down by 24%, while Spanish and Italian stocks were down by over 4%.


In conclusion, the recent £75bn hit on FTSE 100 due to Silicon Valley Bank’s fallout highlights the interconnected nature of the global economy. As Europe becomes the new focus of this fallout, it is important to understand the potential impact of regulatory changes and increased scrutiny on the tech industry. However, it’s also important to recognize the resilience of the FTSE 100 and its ability to bounce back from such challenges. As businesses and investors navigate these uncertain times, it’s crucial to stay informed and adaptable to changes in the global market.