UBS is acquiring a troubled Credit Suisse,while three mid-size US banks have failed or been bailed out. Now investors are worried about the leverage of non-bank lenders.
Turmoil in the global banking sector,hotter-than expected inflation data,and renewed hopes for a dovish Federal Reserve has the cryptocurrency reaching levels not seen since June.
Two separate groups of academics released papers in the past week estimating that banks faced at least $US1.7 trillion in potential losses.
UBS is seeking $US6 billion costs to be covered by the Swiss government,if it buys rival Credit Suisse.
The world has never jacked up the cost of borrowing this fast,so chances are something would go wrong.
Australian investors are hopeful that the global banking wobbles may mean central banks ease their foot off the interest rate pedal.
The ripple effect from the troubles of a few banks has created enough financial panic that it may have put the global inflation genie back in the bottle.
Ahead of the jobs figures,most economists had expected the RBA to hold rates at its April meeting. Some now say the strength in the labour market may have put paid to a rates pause.
The panic that suddenly engulfed Credit Suisse says something very disconcerting about how fragile the global banking system is.
Switzerland’s role as banker to the world’s rich is built on a reputation for institutional discretion and dull reliability. That only makes the scandals,public legal battles and mounting losses at Credit Suisse more striking and hard to comprehend.
Swiss authorities have moved quickly to calm fears about the future of Credit Suisse after a few tough words from its biggest shareholder triggered a share price sell-off.