Wall Street declines on concerns about the banking sector

Economies.com
2023-03-17 15:00PM UTC

US stock indices declined on Friday amid ongoing concerns in the global markets about the banking sector.

 

Insufficient Interventions 

 

Credit Suisse received over 50 billion francs of loans from the Swiss National Bank, in addition to offers to repurchase loans, to improve its situation after causing a shock to the global financial system.

 

The largest shareholder in Credit Suisse said "everything is going alright", and it's unlikely for the bank to seek more capital.

 

The announcements came amid a frantic trading session due to concerns about the financial situation of the bank, which caused concerns to regulators worldwide.

 

International media said that JPMorgan Chase and Morgan Stanley are considering an intervention with liquidity support, and potentially an acquisition of the struggling First Republic bank.

 

The Federal Reserve also announced an emergency funding program to support struggling banks with liquidity.

 

Banking stocks continue to suffer, with First Republic bank collapsing by 21% despite liquidity support from other major US banks, while Credit Suisse stock fell by 6.3%.

 

Monitors are concerned such a crisis could lead to an economic recession in major economies, hurting demand on commodities.

 

On trading, Dow Jones fell 1.2% as of 14:59 GMT, or 385 points to 31,860, while S&P 500 shed 1.1%, or 42 points to 3,918, as NASDAQ tumbled 0.7%, or 86 points to 11,630.

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