Investors frightened by risks of destabilizing the banking system

The acquisition of Credit Suisse by UBS did not reassure markets and investors. Monday, March 20, the day after the operation, mistrust still reigns. REUTERS - DENIS BALIBOUSE

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After the losses of the Asian markets, the European stock markets are heckled this Monday, March 20. Banking stocks are suffering the most, as the takeover of Credit Suisse by rival UBS does not reassure investors.

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Investors are still struggling to assess the situation on Monday, March 20, the day after the acquisition of Credit Suisse, in distress, by the largest Swiss bank, UBS. They also do not seem reassured by the action of several powerful central banks including those of the United States, Canada, England or the European Central Bank.

The unprecedented fact is the speed of their reaction: to avoid any risk of contagion, these institutions agreed Sunday night to facilitate the access of other central banks to dollars, the main currency for financial transactions. "The crises have affected banks far apart, with very different motivations, and the reaction of monetary authorities around the world has been strong and rapid," Paolo Gentiloni, European Commissioner for Economic and Monetary Affairs, said on Monday.

But instead of reassuring, this action seems to sow doubt among investors, who wonder about the degree of seriousness of the situation. A sign of investors' mistrust: the latter, fearing a chain reaction, fall back on gold, a traditional safe haven. The ounce is around $2,000 today.

To calm the markets, in Europe, the financial authorities are multiplying declarations. The euro area banking system is "resilient and sound" and relies on "solid levels of capital and liquidity," the European Central Bank said. The same statement was made by the French and German authorities. The "two sets of problems" observed in recent days around Credit Suisse and the failures of US regulation "do not concern French and European banks," said François Villeroy de Galhau, the governor of the Bank of France.

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Read on on the same topics:

  • Economy
  • Economic crisis
  • Finance
  • Switzerland