The turbulence in the financial sector is not abating: the billions in support package for the ailing Credit Suisse in Europe was followed on Thursday by a concerted aid campaign for another struggling bank in the USA. In the face of liquidity concerns and severe price losses on the stock exchange, the regional bank First Republic receives a financial injection worth billions from the largest US financial institutions. The measure is “highly welcomed” and demonstrates the resilience of the banking system, according to a statement from the Treasury Department and the Federal Reserve.
The monetary system is more stable today than it was in 2008 – said Scholz
After the collapse of the Silicon Valley Bank and the turbulence surrounding Credit Suisse, Chancellor Olaf Scholz (SPD) sees no new financial crisis in Germany and Europe. “I don’t see the danger. The monetary system is no longer as fragile as it was before the financial crisis,” the Chancellor told the “Handelsblatt”. He therefore does not expect any consequences for German savers. The deposits are safe. “We live in a completely different time,” said Scholz, referring to comparisons with the 2008 financial crisis.
It’s about a lot of money: the equivalent of around 51 billion euros to help Credit Suisse out of the crisis
In the US, eleven major banks – including industry leaders JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Goldman Sachs and Morgan Stanley – are to help the troubled First Republic Bank with uninsured deposits totaling $30 billion (28 billion euros). . Unlike the Silicon Valley Bank in California and the Signature Bank in New York, which were closed down by supervisors in the past few days and placed under state control, the banking industry initially intervened here itself. However, the authorities are likely to have exerted a lot of pressure. The US government has been trying for days to ease the situation – so far there has been limited success.
US Treasury Secretary tries to calm down
After the collapse of the start-up financier Silicon Valley Bank – the largest collapse of a US money house since the financial crisis of 2008 – the US government tried to calm the nerves of bank customers in the country with a far-reaching deposit guarantee. At a congressional hearing in Washington on Thursday, Treasury Secretary Janet Yellen reiterated that the banking system remains stable and secure and there is no need to worry about deposits. “The government has taken decisive and vigorous action,” Yellen said.
But despite the courageous intervention, nervousness on the stock exchanges remained high. The crisis at the major bank Credit Suisse also contributed to this, to which the Swiss National Bank provided an aid package in the form of loans of up to CHF 50 billion (almost EUR 51 billion), according to a statement on Thursday morning. This initially calmed down somewhat for Credit Suisse shareholders and the European banking sector, but things remained turbulent on the US stock exchanges.
haz/mak (dpa, rtr)