Germany puts local SVB branch under restriction
STORY: Germany is among nations scrambling to react to the collapse of U.S. lender Silicon Valley Bank.
On Monday (March 13) the country’s financial markets regulator said it was imposing a moratorium on the bank’s branch there.
BaFin said the situation posed no “threat to financial stability”.
But that didn’t do much to reassure investors, with European bank stocks tumbling.
Jochen Stanzl is chief markets analyst at CMC Markets:
“There is a huge amount of uncertainty around because there is the fear of a contagion effect, that what happened at SVB could happen at large banks. That’s the reason for the losses for bank shares. At the same time investors may think that the timing is not bad to take profits after the DAX rose 30% since October.”
Over the weekend, U.S. authorities moved swiftly to reassure SVB depositors, saying it would guarantee access to their money.
But the collapse of the bank has sparked fears for the health of the sector worldwide.
U.S. bank stocks tumbled as much as 7% in early trade Monday, and Germany hasn’t been spared either.
By early afternoon in Europe, Deutsche Bank shares were down over 5%.
Other lenders also tumbled, driving Europe’s STOXX 600 index to losses of over 2%.