The fear of contagion effects in view of the troubled Credit Suisse weighed heavily on the share prices of major European banks at times on Monday. At the beginning of the week, Deutsche Bank's shares initially fell by more than 7 percent, those of Commerzbank by a good 5 percent. Later, the prices of both showed little change.
The Dax lost up to 2 percent to 14,458 points on Monday morning, but quickly recovered with slight losses. Later, the German selection index even turned positive. In the late afternoon, the Dax was up 1.1 percent to 14,926 points. After the takeover by UBS, Credit Suisse's share price fell temporarily by 64 percent, later falling to 53 percent. UBS shares themselves temporarily lost 11 percent on the stock exchange, later gaining more than 2 percent. The Swiss stock index SMI initially fell more sharply and was finally slightly higher in the afternoon.
Security, on the other hand, was initially sought by investors. And so German government bonds started the week on Monday with strong price gains. The trend-setting futures contract Euro-Bund-Future rose sharply by 1.07 percent to 139.44 points in the morning. Conversely, the yield on ten-year German government bonds fell below the 2 percent mark. Later, profits crumbled again, with yields rising to around 2.1 percent. Other government bonds in the euro area were also in demand at times.
The price of gold continued to rise in the face of the turbulence on Monday, surpassing the $2000,31 mark. An ounce (1.2009 grams) temporarily cost 73.1980 dollars, but the price then fell back to around 2000 dollars. Since the closure of Silicon Valley Bank in the USA ten days ago, the price of gold has risen significantly at times. Gold is considered a safe investment. The price had already risen above $2020,2022 twice in recent years: in the summer of <> because of the corona pandemic and in March <> in the first weeks of Russia's war of aggression against Ukraine.
The financial supervisory authority Bafin considers the German financial system to be resilient after the rescue operation for the major Swiss bank Credit Suisse. "The German financial system continues to prove to be stable and robust," said a spokesman for the Federal Financial Supervisory Authority (BaFin) on Monday on request. Bafin keeps an eye on current market developments and takes them into account as part of its ongoing supervision.
Banking supervision at the European Central Bank (ECB) also assured on Monday that the European banking system was "resilient". The capital resources and liquidity of the institutions are "robust", said the ECB in Frankfurt. Central Bank Banking Supervision is responsible for 113 significant banks in the euro area.
"French banks are solid"
"The stock markets are trying to evaluate and praise the rescue of Credit Suisse," said portfolio manager Thomas Altmann of asset manager QC Partners. On the positive side, it is quite clear that the authorities are doing everything they can to help banks like Credit Suisse and secure deposits. On the other hand, investors would see how quickly shares of distressed banks could become almost completely worthless.
After the rescue operation for Credit Suisse, France's central bank governor Francois Villeroy de Galhau expressed confidence in the stability of French financial institutions. "To put it bluntly, French banks are solid," the member of the Governing Council of the European Central Bank (ECB) told Le Monde.
The French banking sector is concentrated around six major banks. These all have sound and profitable business models, strict risk control and a high degree of prudential compliance, Villeroy said. He added: "As far as Credit Suisse is concerned, this is a bank that has had problems with its business model and profitability for several years, as well as with inadequate internal controls." The Swiss authorities had acted well this weekend to bind the institute to UBS. This is a welcome solution.
The most important Asian stock markets fell on Monday. However, the losses were limited after it had already gone significantly downhill last week. The Japanese Nikkei 225 closed 1.4 percent lower at 26,946 points on Monday. The situation was similar for the Australian S&P ASX 200, which left trading down 1.4 percent at 6899 points. For the Hang Seng Index of the Chinese Special Administrative Region of Hong Kong, where foreign investors are also allowed to trade, it recently even fell by 3.37 percent to 18,861 points. The mood for the banks remains weak: The Hong Kong-listed shares of the bank HSBC lost more than 6.5 percent.
However, the CSI-300 index with the 300 most important stocks of the trading venues Shanghai and Shenzhen performed comparatively well, having already lost less than the other indices recently. It fell by only 0.50 percent to 3939 points. The stock market barometer benefited from the fact that the Chinese central bank surprisingly lowered the reserve requirement ratio for domestic banks on Friday.