Following a sharp sell-off in American bank shares which led to concerns about the industry’s susceptibility to increasing interest rates, European bank shares slumped on Friday.
Silicon Valley Bank, a significant financial player in the US IT sector, sought new capital after losing $1.8 billion issuing a package of bonds to satisfy depositors’ demands for cash, which led to a global slump in bank shares, was compelled to gather.
The incident may be the “breaker of straw,” according to Neil Wilson, chief markets analyst at Markets.com, for banks after worries over steadily rising interest rates and a shaky US economy.
With falls for most major lenders, including HSBC, down 4.5%, and Deutsche Bank, down 7.9%, Europe’s STOXX banking index dropped more than 4% and was on track for its largest one-day drop since early June.
