Which banks are most at risk following the Federal Reserve’s further 0.25% interest rate hike?
Faced with the central bank’s decision, Chairman Jerome Powell could not help but at the same time reassure the public about the soundness of the banking system, emphasizing the fact that the Fed would do whatever it proved necessary to ensure the industry stability.
The financial markets reacted positively to this compromise by filling the stock exchanges with purchase orders. At the same time, the weight of the risk balance moves completely towards the banks, even more stressed by central bank monetary policy. Analyzing the situation in more detail, bank shares continue to register on the stock market negative sessions worrying analysts. Specifically, the focus shifts towards some realities, in theory particularly exposed to risk.
Banks at risk after rate hike
Looking directly at the Held to maturity (HTM)a component of the bank balance sheet blamed for being the main cause of the recent US banking collapses, other institutions also exhibit critical values.
Among the smaller banks, the Prosperity Bancshares (PB)with an exposure, compared to the bank’s total assets, only 5 percentage points lower than the Silicon Valley Bank. On the stock market, the bank lost more than in less than two weeks 10%.
Among the largest and most renowned structures we also find JP Morganwhich presents a report anyway above 10%. The title is on the stock market JPMcompared to its highs, recorded a higher loss all’11%.
The situation is also under the magnifying glass of the experts UBS-Credit Suisse and the possible consequences that could arise as a result of the recent complications related to its debt securities.
AXAa major globally active insurance group, appears to have an exposure of approx $640 million against the Swiss bank Credit Suisse. Many experts urge to remain calm as the company it is not exposed to the obligations of Credit Suisse AT1 but only towards obligations guaranteed and bonds senior.
Specifically, the group also has an exposure of 66 million in corporate bonds towards SVB, presumably in dollars since the reference currency has not been specified. Again, the CEO of the company urges the investing public not to worry as the exposure turns out to be anyway very limited.
