Financial markets have been shaken in less than 2 weeks. The collpase of 3 US banks, Silvergate, Silicon Valley Bank and Signature Bank and Big Global Lender, Credit Suisse have brought back fears of a financial crisis.
In the US, the collapse of Silicon Valley Bank, the country's 16th largest bank, panicked customers who rushed to withdraw their deposits, causing a bank run and this all happened as SVB, announced it needed to raise capital.
Meanwhile in Europe, investors had already been watching the slow decline of Credit Suisse over the years. From its accounting errors, involvment in scandals, billions of losses. The SVB collapse exacerbated investor concerns as many started to shine a spotlight on other banks that could be in a similar vulnerable position.
And now in recent days, the ubs deal to acquire Credit Suisse for USD3,2 billion, agreed to on Sunday, offers hope but doubt still persists in the global financial system.
The US federal reserve along with five other central banks have announced coordinated action to reassure global banks. As the immediate response to prevent the contagion risks have been contained.
