Markets were extremely concerned with central banks as they kept raising interest rates and the economic data took particular importance in this environment, especially inflation and growth. But, the last two weeks have been hectic, as the banking crisis has engulfed the financial sector.
SVB faced a crisis, prompting US regulators to take control of the California-based lender. The bank’s collapse caused panic in financial markets, which affected weaker financial institutions already struggling with the unintended consequences of high interest rates and self-inflicted wounds. Another US regional bank, Signature Bank, was also closed down while First Republic Bank (FRC) was propped up to prevent its collapse. Credit Suisse, a Swiss bank of global financial significance, was at risk of failing before it was taken over by UBS. This marks the first major threat to a bank of such significance since 2008.