zeb.market.flash. Issue #44: Banking turmoil raises old familiar questions
Our overview of current developments in the global banking market
And here is what this issue is all about:
-3.9% QoQ TSR performance of global top 100 banks
- Turmoil in the banking market has led to banks underperforming all other sectors in Q1 23, with technology being the highest performer (+19.6% QoQ).
- U.S. banks were hit hardest by market turmoil (TSR -11.9% QoQ), while Western European banks (TSR +5.6% QoQ) lifted the global top 100 banks.
- Following improved GDP forecasts, Germany and Western Europe are now expected to avoid a technical recession in 2023.
- After peaking rates in Q4 22, inflation rates in Germany (8.8% YoY) and Western Europe (7.7% YoY) declined in Q1 23 but are still way above target levels.
- The collapse of Silicon Valley Bank (SVB) and Credit Suisse (CS) in March 2023 caused significant turmoil in global banking and beyond.
- Given the widespread fear of contagion in the banking sector, we address three fundamental questions: 1) Do the failures of SVB and CS point to a larger systematic problem? 2) Do the banks’ KPIs indicate another global banking crisis? 3) Do the cases of SVB and CS call for a further tightening of regulation?
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