On Monday, the Dax extended its losses from last week. The banking sector remains a concern for investors. The possible consequences of the collapse of Silicon Valley Bank (SVB) in the USA are currently being weighed, said a stock market expert. In the morning, the German benchmark index fell by up to 3.3 percent to 14,914 points. After that, the Dax recovered somewhat and was recently above 15,000 points again. The M-Dax lost 3.0 percent to 27,171 points. The leading eurozone index EuroStoxx 50 fell by 2.7 percent to 4117 points.
Deutsche Bank's share price fell by another 7.0 percent after losing a good 7 percent on Friday. The shares of Commerzbank crashed in the meantime by 11.8 percent after a minus of 2.6 percent on Friday. Bank shares were under pressure across Europe, with the Stoxx banking index plummeting by 8 percent. In Zurich, the shares of crisis-ridden Credit Suisse fell by 8.7 percent to a new record low of 2.28 francs. UBS shares fell by 3.5 percent. The banking index fell by 3.9 percent.
Bafin orders moratorium
The securing of all deposits by the US authorities, after the faltering American start-up financing bank SVB and the New York-based Signature Bank had to be closed, has not yet provided the hoped-for calm on the stock markets. "But it also shows how seriously the US Federal Reserve, the FDIC protection fund and the Treasury Department take the case," said portfolio manager Thomas Altmann of trading house QC Partners. "The big and crucial question now is how many banks will follow."
Even before the weekend, SVB, which specialises in start-up financing, had been temporarily closed and placed under state control after a failed emergency capital increase. The financial services supervisory authority Bafin ordered a moratorium on the German branch of the SVB in Frankfurt on Monday. The supervisors justified the decision with "the existing risk for the fulfilment of obligations towards creditors". Silicon Valley Bank in Frankfurt is a banking partner of German companies such as Hellofresh and Lilium.
The Bafin measures concern a ban on sales and payments. In addition, the German SVB must close the bank for dealings with customers. However, Bafin sees no threat to financial stability from the SVB's plight. The balance sheet total of the branch in Frankfurt was 2022.789 million euros at the end of 2. Nevertheless, the Bundesbank's financial crisis unit will also discuss the possible effects of the SVB collapse on Monday. The committee is meeting to analyse the situation and discuss the possible consequences for the German financial sector and the financial markets, a Bundesbank spokesman said on request.
Doubts about interest rate hikes by the Fed
At the weekend, the US Treasury, the US Federal Reserve and the US Deposit Insurance Authority declared that deposits with the SVB and another institution would be protected. The US Federal Reserve also launched a new lending program to provide banks with liquidity.
Economists at US bank Goldman Sachs, led by Jan Hatzius, also expect recent events in the US banking system to prompt the Fed to pause its monetary tightening cycle next week. They also referred to the uncertainty about further interest rate hikes in the coming months. Concerns about the US banking system also pushed Japanese stock markets into the red on Monday. The Tokyo Nikkei index, which comprises 225 stocks, closed 1.1 percent lower at 27,833 points. The broader Topix index fell by 1.5 percent to 2001 points.
However, the protection of all deposits by the US Federal Reserve, the FDIC protection fund and the Treasury should stabilize investors over the long term, analysts said. "Stocks are likely to return to previous levels by Tuesday," said strategist Kazuo Kamitani of Japanese investment bank Nomura.