SVB Crisis Triggers Loss in Global Financial Equities Worth $465 Bn in Two Days

After (SVB) Silicon Valley Bank’s bankruptcy, investors reduced their exposure to lenders from Japan to New York; causing the total value of global financial equities to decline by $465 billion in just two days.

The MSCI Asia Pacific Financials Index had an increase in losses on Tuesday, falling as much as 2.7% to its lowest level since November 29. Hana Financial Group Ltd. of South Korea dropped 4.7%, In Japan, Mitsubishi UFJ Financial Group Inc. dropped as much as 8.3%. Along with these, ANZ Group Holdings Ltd. of Australia dropped 2.8% as well.

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There are worries that financial institutions’ acquisitions in bonds as well as other securities may have an impact on the anxiety brought on by the SVB. As a result of predictions that the Federal Reserve will delay hiking rates owing to the turbulence in the banking sector, Treasury yields fell on Monday.

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Severity that MSCI Faced

Since Friday, the combined market value of the firms tracked by the MSCI EM Financials Index and MSCI Global Financials Index has decreased by nearly $465 billion. While the KBW Regional Financial Index fell 7.7% on Monday, the biggest drop since June 2020, US regional banking institutions were among the worst hit.

The MSCI Global Financials index’s top losers over the time period were First Republic Bank’s shares, which fell about 73% in three sessions. All of the issuer’s long-term ratings have been under review by Moody’s for a reduction.

Greatest Hit Regions and Institutions from SVB Collapse

On Monday, the stock prices of European banks and insurers also plummeted. With worries that the collapse of SVB could have wider financial industry repercussions, the price of insuring Credit Suisse Group AG’s bonds against default increased to an all-time high and its stock fell as much as 15% to a new record low.

According to statistics on approximately 130 Asia – pacific region institutions with plenty of than $5 billion of assets, Japanese banks conspicuously rank among the countries with the greatest unrealized loss-to-equity ratios in the region. Unachieved loss-to-equity percentages of at least 9% were among Fukushima Bank Ltd, Tsukuba Bank Ltd., and Jimoto Holdings Ltd.

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