Financial analysts expect the leadership of the European Central Bank (ECB) to raise the key rate by another 50 basis points (0.5%) from the current 3% to 3.5% annually. The tightening of the currency regulator’s monetary policy will result from the bankruptcy of the major American investment bank Silicon Valley Bank (SVB), informs Reuters, citing the source.
In addition to the collapse of the SVB, an additional increase in the key ratio could lead to a sharp decline in the shares of Swiss bank Credit Suisse. At the last ECB meeting, where the regulator administration increased the rate by 50 basis points, President Christine Lagarde said that they will increase this rate by the same amount in March 2023.
“Banking tensions in the US and now Europe may prompt central banks to back off from their hawkish statements and take a more cautious approach to avoid rising systemic risks, because fixing a full-blown crisis will be much more difficult than inflation. This means that for now, the “pigeons” may prevail, the article says.
16 March Bank Credit Suisse reportedIt will borrow up to 50 billion Swiss francs (approximately $53.7 billion) from the Swiss National Bank (Central Bank). Additional cash injections should support the core business of the credit institution and its customers.