By Oyintari Ben
LONDON/FRANKFURT- On Friday, a spectacular sell-off in U.S. bank stocks spread to Europe, sending some of the biggest banks in the continent’s stock prices plummeting to their lowest levels in nine months.
As of 08:25 GMT, the STOXX banking index for Europe dropped 4.4%, on pace for its most significant one-day fall since early June.
Most prominent players were down, including HSBC (down 4.5%) and Deutsche Bank (down 7.9%).
The Silicon Valley Bank, which was compelled to raise new capital after losing $1.8 billion selling a package of mostly U.S. bonds to satisfy depositor demands for cash, was the cause of the global collapse in bank stock prices.
The incident highlighted the fragility of banks, many of which received support after the world financial crisis more than ten years ago.
Central banks and governments printed trillions due to the crash and the pandemic’s economic effects, which they are now trying to control.
