The Ibex collapses 6% in its worst week since the war
A trader on Wall Street with First Republic Bank quote screens. /
The selective loses 1.% to 8,719 points while Credit Suisse collapses again | The market believes that the bailout of 30,000 million for the First Republic Bank is not enough to stop the banking crisis
Neither good intentions, nor firm defense of the system by the supervisors, nor billionaire bailouts reminiscent of bygone times. Nothing manages to stop the harsh confidence crisis unleashed this week on the banking sector, which in the early hours of Thursday was experiencing a new chapter with the decision of eleven large US banks -among them JP Morgan, Morgan Stanley, Citigroup and Wells Fargo- to bail out to First Republic Bank with a joint injection of 30,000 million dollars.
It seemed that the operation, together with the determination of the central banks to act "if necessary" had managed to somewhat allay fears of a new banking crisis. Nothing could be further from the truth. Rumors of disagreements between Credit Suisse and UBS over a possible merger had investors reeling again. The Swiss entity -to which the central bank will inject up to 50,000 million- lost another 8% on the stock market yesterday.
But the final blow came with the ECB's decision to call an extraordinary meeting of its council. There was no final decision or concrete measures. But yes statements defending again the solidity of the system.
The words of the organization are not enough for the market and a new wave of sales was unleashed that ended with falls of 1.5% in the main European markets. In Spain, the Ibex-35 fell 1.92% to 8,719 points, accumulating a 6% drop in the week, the worst for a year
It must be taken into account that investors also had to deal with the extra dose of tension that is usually caused by the so-called 'quadruple witch hour' of maturities, which is repeated every third Friday in March, June, September and December. Four days in which trading volumes skyrocket and therefore increase volatility.
The spirits slack on the parquet
In any case, fear is palpable among investors. The banks were again the main victims of the session, with losses of 4.6% for Santander, 3.5% for BBVA, 3.4% for Sabadell -which is already trading at 0.98 euros- and more than 2%. at Bankinter and CaixaBank.
The situation is critical. Since the fall of Silicon Valley Bank – which officially filed for bankruptcy this Friday – the six Spanish entities have lost 26,000 million euros on the stock market.
One of the big problems is that, after the ECB's firm intention to raise rates and, at the same time, inject liquidity if necessary, many doubts persist as to whether the body will be able to 'suck' and 'blow' at the same time without consequences financial. And no one doubts either that the underlying problems of more banks will be uncovered in the coming weeks.
In fact, there is already data that shows the concern of the entities themselves in the face of possible contagion. In just a few days – and even if it is only a preventive measure – US entities have triggered liquidity requests to the Fed through the body's usual window.
Specifically, and according to data published by the institution, they have requested close to 153,000 million dollars this week alone. To get an idea, the previous one asked the central bank about 4,580 million. It is a historical maximum, which also exceeds the 111,000 million that were reached during the previous financial crisis of 2008 and that established the previous record. "We need to stop this now," said the prestigious manager Bill Ackman through his Twitter account.
