On March 15, the shares of one of the largest investment banks in Europe – Credit Suisse – lost over 15% in price (at the moment, a decrease from ATH reached 98%). However, the problems of the banking giant did not greatly affect the cryptocurrency market.
Credit Suisse plunges to fresh All-Time low as Saudi National Bank rules out assistance. Now down 96.7% below ATH. pic.twitter.com/33KDigAlDc
— Holger Zschaepitz (@Schuldensuehner) March 15, 2023
Sales of securities in the banking sector resumed with renewed vigor after reports of a lack of capacity for the largest shareholder of Credit Suisse – Saudi National Bank – to support the organization.
CEO of Ammar Al Hudayri Institution in an interview Bloomberg cited “multiple reasons” that would prevent the current threshold in equity (9.9%) from being surpassed. This is how the top manager reacted to the agency’s question about the readiness to provide liquidity to the investment bank.
Ralph Hamers, CEO of competitor UBS Group AG, declined to comment on Credit Suisse’s position, noting that the organization he leads is focused on organic growth.
The reluctance of the Swiss National Bank to comment on the situation only increased the crisis of confidence.
The cost of insurance against Credit Suisse default reached 800 bp. n. (a similar level was in Lehman Brothers before bankruptcy). For comparison, at the peak of the 2008-2009 crisis, the institution’s indicator remained below 300 bp. p. At the time of writing CDS on the organization’s debt is nine times the value of Deutsche Bank and 18 times the value of UBS.
Credit Suisse Group Chairman Axel Lehmann assuredthat the bank is in good shape and possible comparisons with Silicon Valley Bank are inappropriate due to its strong capital adequacy and liquidity position, as well as the restructuring program launched in October. He stressed that government assistance “is not a topic” for the bank.
According to WSJrepresentatives ECB contacted major lenders to assess their exposure to Credit Suisse-related risks.
The situation around the institution influenced the prospects for the upcoming meeting of the European regulator on Thursday.
The market doubted the relevance of the morning Reuters insider info in raising the key rate by 0.5%. The average step score dropped to 0.36%.
The maximum gain is now estimated at 75 bp. n. Before the collapse of the American banks, it was predicted to be twice as high.
Regarding the meeting Fed On March 22, the market fluctuates between options for a pause and a 25 bp increase. n. Investors began to expect policy easing by 60 bp. already by September 2023.
On March 10, the forecast for the rate curve assumed its peak at the level of 5.2% (the current value is 4.5-4.75%) and a decrease to 4.8% by December.
Against the backdrop of a decrease in the Stoxx 600 (Europe) and S&P 500 (USA) stock indices by 2.3% and 1.7%, respectively, the capitalization of the cryptocurrency market fell by 3.4% (estimate for 24 hours), according to CoinGecko.
The dynamics of the latter reflects a pullback after a sharp increase on the news about the slowdown in inflation in the US, which occurred earlier. Following the release of macro statistics, the bitcoin rate updated its maximum since June 2022, exceeding $26,000.
At the time of writing, the first cryptocurrency has corrected by 5.4%, Ethereum — by 5.7%.
Recall that the head of Morgan Creek, Mark Yusko, predicted the start of a bull market for digital assets in the second quarter of 2023. As a factor, he cited a slowdown or pause in the tightening of the Fed’s policy.
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