Shockwaves from SVB collapse hit global bank stocks gripped by contagion fears – National |

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Global bank stocks continued to be hit on Tuesday due to contagion fears after the collapse of Silicon Valley Bank (SVB). The European banks index fell by 0.6%, following its biggest percentage loss in over a year on Monday. Meanwhile, an indicator of credit risk in the euro area banking system rose to its highest level since mid-July. Japanese banks were significantly affected, after the Bank of Japan said that the financial institutions should be able to absorb any losses caused by external risks, such as rising overseas interest rates. On Monday, US President Joe Biden attempted to reassure markets and depositors following SVB’s collapse, but traders now believe that there is only a 50% chance of any rate hike by the US Federal Reserve next week. This is compared to 100% earlier this week. Despite this, the market uncertainty continues with investors remaining highly anxious about the health of smaller banks, tighter regulation, and the impact on depositors if banks fail.

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