New stock market storm for banks. Socit Generale, BNP Paribas and Credit Agricole shares ended down sharply on Wednesday. After the bankruptcy of the American bank SVB, it is the situation of the bank Credit Suisse which worries and penalizes the entire banking sector.
This time, there is: after a short respite yesterday Tuesday, the stock market storm triggered by the bankruptcy of the US bank SVB has indeed reached France and Europe. And the first shipwrecks, logically, are the banks.
At the close, the two main French commercial brands, BNP Paribas and Socit Generale, recorded a sharp drop: -10.11% for the first and minus 12.18% for the second, the red lantern of the CAC 50. For its part , Crdit Agricole lost more than 5%.
The contagion passes in particular through Credit Suisse, a large European bank, of so-called systemic size, already weakened by several scandals. It has lost more than a quarter of its stock market value today, after its main shareholder ruled out bailing it out if necessary.
Despite the reassuring speeches, should we start worrying? To what extent is this stock market collapse weakening French banks? Should I, as a customer, take action?
It’s irrational… Should you fear a new banking crisis after the bankruptcy of SVB?
Why do banks plunge into the stock market?
This is the aftermath of the fall, last week, of Silicon Valley Bank (SVB), second largest failure in U.S. banking history after that of Lehmann Brothers, in September 2008. (…) We expected it after such a shock (…), explains Thomas Perret, president of Mon Petit Placement, in a press release. However, we must not overreact and arm ourselves with patience. The French banking system is solid and has a high liquidity ratio.
This Wednesday, the Prime Minister, Elisabeth Borne, asked the Swiss authorities to settle the problems of the bank Credit Suisse. The head of government reaffirmed that French banks were not affected by this bankruptcy. I confirm to you, as the Minister of Finance recalled yesterday, that French banks are not exposed to any risk following the bankruptcy of the SVB, she said.
Is my bank weakened?
A sudden fall in the market value of a bank does not automatically mean that it is, as a company, in great difficulty. The fall today of Socit Gnrale or BNP Paribas is spectacular, but not unheard of.
Since the financial crisis of 2008, regulatory requirements weighing on European banks have been strengthened to prevent the occurrence of a new crisis in the entire banking system. She must comply with a series of prudential rules, in particular a so-called short-term liquidity ratio. He requires them to have sufficient liquid assets (therefore easily mobilized) to carry out a sudden liquidity crisis, for example a massive withdrawal of their clients’ deposits.
Their ability to withstand shocks of the type that is taking place has been test several times by the European Central Bank, and no French bank has, to our knowledge, failed to stress testing.
As a result, they are, in the opinion of all observers, much better equipped than they were in 2008 to withstand a new shock, even a systemic one. There is no reason to worry, believes Xavier Timbeau, director of the French Observatory of Economic Conditions (OFCE).
Are my bank deposits in danger?
Nothing indicates at this stage that the situation could deteriorate to the point of depriving you of access to your cash. In other words, it seems no need to empty your current accounts or savings.
We should also remember that your money, if you have entrusted it to a credit institution, is covered by a deposit guarantee mechanism, up to 100,000 euros per customer and per bank. And this excluding regulated savings accounts (Livret A, LDDS, LEP, CEL, Livret Jeune, etc.), which are directly guaranteed by the State. If you have life insurance or stock market securities, a similar mechanism also covers you, this time up to 70,000 euros.
Bankruptcy: these 4 guarantees that protect your savings from an (unlikely) crash