DLNews Business:

IS THE NEXT FINANCIAL CRASH COMING?

Bank lost 60 percent share value in one day - Whole industry in decline - What experts say.

Suddenly it's back, the fear of a financial crash like in 2008: the US authorities closed the Silicon Valley Bank (SVB) on Friday evening. The company had made severe money problems public a few hours earlier - red alert!

SVB shares lost 60 percent of their value on Friday. It went down to 35 Dollars. Trading was suspended shortly after that. At the beginning of February, the papers had cost just under 320 Dollars.

Greg Becker was the head of Silicon Valley Bank, which US authorities have now shut down.

Silicon Valley Bank stock plummets

Afterward, many frightened entrepreneurs stored their money at the bank for safety. According to reports, this also included tech mogul Peter Thiel (55), who founded PayPal and the security software company Palantir.

Now the SVB is "insolvent," according to US authorities. A consequence of the debacle: Bank shares plummeted worldwide! On Wall Street, prices collapsed drastically.  The shock waves swept through the entire banking sector.

Is this the beginning of the next banking crisis?

Jochen Stanzl, chief market analyst at CMC Markets: "Investors are now waiting for clarifications from the big banks as to whether and to what extent the problems of SVB Financial also apply to them."

Meanwhile, chief strategist Joachim Klement of the investment bank Liberum Capital does not believe that the situation of the SVB poses an immediate threat to the European banking system. The US institute has an exceptional business model and specializes in venture capital and the financing of young growth companies. This is unique within the banking scene.

Bad loans are likely to increase this year, Klement said. But the banks' reserves in Europe and the USA are sufficient to absorb problems.

Even the US bank Morgan Stanley did not initially assume that the SVB phenomenon would rub off on other regional institutes: The financing pressure is peculiar to the Silicon Valley bank.

US Treasury Secretary Janet Yellen told a congressional committee that there were "developments regarding some banks that I am monitoring very closely." Banks' financial losses are "a cause for concern."

Conclusion: The experts still disagree about the effects of the SVB crash. The situation cannot be directly transferred to other banks. But the whole industry is alarmed.