Bank stability Q&A: one month on from turmoil, what next?

Justin Bisseker

Grant Toch

Kevin Murphy

As more details emerge of the pace of withdrawals that triggered crises for Silicon Valley Bank and Credit Suisse, our investment experts assess the longer-term outlook for banks.

In mid-March, the failure of three mid-sized US banks – most notably Silicon Valley Bank (SVB) – caused turmoil across global stock markets. Bank shares fell sharply.

Nervousness was not confined to the US, with investors soon focusing on perceived weak spots in other regions. A week after the failure of Silicon Valley Bank, the Swiss authorities brokered a deal that would see UBS take over troubled rival Credit Suisse. Like SVB, Credit Suisse had also been experiencing high levels of outflows: CHF61.2 billion ($68.6 billion), according to its recent Q1 results.

Yet that period of extreme market stress in March has proved short-lived. Bank shares, as measured by the MSCI World banks sub-index, have recovered off their March lows and returned to where they were at the start of the year.

Click here to read more...