(News Bulletin 247) – The main European stock markets start the week with a sharp drop: Paris and Frankfurt are down around 2.4%, behind London (-2%), at the start of a week ahead responsible both on the monetary policy front and on that of businesses and the economy.

The bankruptcy of Silicon Valley Bank (SVB) reminded investors that the financial system remained fragile in a context of rising interest rates and slowing activity.

The news caused a wave of panic last week on global stock markets due to fears of a possible domino effect that could affect leading banking institutions.

It seems difficult to assess the exposure of the banking sector to the file, but a good number of analysts are trying to allay the worries that have recently appeared among investors.

‘While news of a bank failure immediately brings back memories of the 2008 financial crisis, we believe it is too early and still unwarranted to draw such comparisons at this time’, write the teams of the American broker Edward Jones.

‘We believe that we should not rule out a credit risk with the weakening of economic conditions, but SVB remains a very small institution compared to the American banking system (19.800 billion dollars)’, adds the broker.

Another reason for relief, the Fed guaranteed this weekend that all customers of the Californian bank could recover their funds and some strategists believe that this crisis situation could lead the central bank to give up raising its rates next week.

Caution on the world markets should be reinforced by the expectation of the publication, tomorrow, of the latest inflation figures in the United States, which should make it possible to determine whether the rise in prices is finally receding.

In terms of monetary policies, the ECB – which is far from having achieved its inflation target – should once again raise its key rates by 50 basis points on Thursday and stay the course for future rate hikes.

In European corporate news, HSBC Holdings on Monday announced the takeover, with immediate effect, of the UK operations of troubled US bank Silicon Valley Bank, SVB, for a symbolic sum of one pound sterling. Noel Quinn, the chief executive of the banking giant, explains in a press release that the operation makes “strategic sense” by allowing his establishment to strengthen itself in the high-growth sectors of technologies and life sciences.

Porsche has published group sales of 37.6 billion euros for 2022, representing growth of 13.6%. The group’s operating profit amounted to 6.8 billion euros, up 27.4%.

Finally, Holcim announces the acquisition of INDAR, one of Mexico’s leading hardware wholesalers, with net sales in 2022 of USD 71 million.

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