FT News Briefing SVB jitters spread to global markets
Mar 14, 2023
The collapse of a major U.S. bank sent shockwaves through global markets, prompting investors to seek safer options. Regional banks faced significant sell-offs, raising concerns about deposit outflows, particularly from tech-linked institutions. As tensions rise, venture capitalists are scrutinized for their roles in the panic. Government efforts to stabilize the banking system are met with ongoing anxiety from depositors. Experts reflect on whether current market reactions are justified and the broader implications of the banking crisis.
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Global Market Shock
- The collapse of Silicon Valley Bank shocked global markets, triggering a flight to safety.
- Investors are betting the Federal Reserve will slow or stop raising interest rates.
Global Impact of SVB Collapse
- SVB's collapse, despite being a single bank, had a significant global impact due to its ripple effect on US government bonds.
- This triggered rallies in bond prices across the Eurozone and the UK.
US Regional Bank Sell-Off
- US regional banks, particularly in the West, experienced a sell-off following SVB's collapse.
- First Republic and Zions Bank saw significant share drops, raising concerns about broader instability.