The Silicon Valley Bank's collapse has sent ripples across the global banking, tech and healthcare sectors, causing stocks markets to plunge. After Signature Bank in New York had to shut shop following a massive outflow of deposits and exposure to crypto, First Republic down 65 per cent and Western Alliance Bancorp with a 75 per cent dip, led US banks bleeding value.
Contagion spooks investors, could affect depositors
As several American banking stocks continue to nosedive, trading has been halted by dozens of lenders in the aftermath of the SVB crisis. The US media reports come at a time when European banks such as Credit Suisse and HSBC have also experienced a similar rout. Zions Bancorp, PacWest Bancorp and other regional lenders in the US are also under pressure, despite US President Joe Biden urging people to trust the banks.
Investors relentlessly selling off banking stocks
The federal deposits insurer has also tried to assure consumers and investors by setting up a Deposits Insurance National Bank of Santa Clara. JP Morgan has already provided $70 billion in liquidity for First Republic Bank, but none of it has worked in preventing the banking sector's bloodbath. Indian indices were also dragged down by the banking sector in particular, although all stocks were in red.
