The failure of Silicon Valley Bank scares the markets, the banks are starting in the red

MILAN. Eyes focused this morning on the opening of the European stock exchanges after the failure of Silicon Vally Bank and the fear of a domino effect on other US institutions. Given the strong uncertainties, the European markets opened lower but without major jolts. Attention has now shifted to the opening on Wall Street in the afternoon.

A still bearish start for the European stock markets, after last week’s losses and with the markets’ attention focused in particular on the ECB meeting scheduled for Thursday and on the tensions in the US financial system.

A few minutes after the start of trading, the Ftse Mib dropped 1% in Milan. Affected by the sales is the banking sector where Bper sells 3%, Banco Bpm 2%, Unicredit 1.8% and Intesa 1.7%. Among the technological ones, Stm is not priced, which marks a theoretical drop of 2.6%.

The Ibex 35 of Madrid (-0.9%), the Cac 40 of Paris (-0.5%), the Ftse 100 of London (-0.3%) and the Dax of Frankfurt (-0. 1%).

Meanwhile, on Forex, the euro/dollar exchange rate rises above 1.07.

Tonight the Federal Reserve, the Treasury Department and the Federal Deposit Insurance Corporation announced that starting today, all Silicon Valley customers will be able to withdraw money, regardless of the amount. The Federal Reserve is making a new special credit line available to banks that may find themselves in a shortage of liquidity. Interventions were also decided for Signature Bank, another company exposed to cryptocurrencies that risked cracking, while an emergency credit line was made available to First Republic Bank.

Meanwhile, emergency measures are also being decided very quickly in Europe: the banking giant HSBC, through its British subsidiary HSBC UK, has announced the purchase, with immediate effect, of the British branch of the US bank Silicon Valley Bank, which went bankrupt last Friday. The purchase takes place at the symbolic price of one pound. SVB UK, as at 10 March had loans of around £5.5 billion and deposits of £6.7 billion and reported a pre-tax profit of £88 million last year.

The week will be full of appointments. On the macro front, the focus will be on February’s US consumer price report due tomorrow, especially after Fed Chairman Jerome Powell recently emphasized that further decisions will be based on economic data.

Still on the subject of central banks, the meeting of the ECB is scheduled for Thursday, from which operators expect a rise in interest rates by half a percentage point.