![]() ![]() ![]() But the swings in expectations of future interest rates were so sharp this week that it is clear that traders are as surprised and confused as the rest of us. Sometimes we think that “the markets” know all this stuff. Maintaining the confidence of depositors is, as ever with banking, the vital goal.Īnd who would have foreseen that as it increased interest rates again this week, the European Central Bank would have to pledge that it stands ready to provide liquidity to the euro zone banking sector if needed, even though it believes the sector is resilient and well-capitalised? With ECB vice-president Luis de Guindos reportedly telling EU finance ministers in private that some euro zone banks might be vulnerable, this story does not look like a one-week wonder. This weekend urgent efforts are underway to engineer a merger with the other big Swiss lender, UBS. So did the need for the Swiss central bank to step in and pledge support to Credit Suisse, even if it has been in trouble for some time. The sudden collapse and bailout of Silicon Valley Bank and a couple of other small US banks came out of the blue. The past week or so has shown yet again that no one really knows anything. ![]()
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