It’s been a relatively calm start to the week, with investors seemingly relieved that the weekend brought no fresh turmoil in the banking sector.
Deutsche Bank under pressure
That was clearly the fear going into it on Friday, with Deutsche Bank being hit particularly hard amid concerns it could be next in the firing line even if the fundamentals didn’t necessarily back that up.
We will continue to feel anxious until there is some calm. Despite Friday’s small frenzy, I believe we can now say that the first wave of calm is over. That isn’t to say that I think the storm has passed, just that the panic of the last few weeks may subside and allow for a more rational market to re-emerge. Or perhaps I’m being too hopeful for a Monday.
Over the weekend, authorities worked hard to clean up the mess from the previous weeks. It was a significant portion of SVB which was sold to First Citizens Bank this weekend, while the FDIC retained other assets.
It is important that both the US and Europe have shown the ability to quickly and decisively address the fallout of the recent turmoil and stop it from getting worse. That…