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| Version 1 | Version 2 |
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| Banks shares hit as investor nerves return | Banks shares hit as investor nerves return |
| (32 minutes later) | |
| Bank shares across Europe have fallen sharply as worries over the financial strength of the sector return. | Bank shares across Europe have fallen sharply as worries over the financial strength of the sector return. |
| Shares in Germany's Deutsche Bank saw the biggest fall, dropping 14% on Friday, with other lenders also seeing big losses. | |
| Investors have already been spooked by the collapse of two US banks and the rushed takeover of Swiss giant Credit Suisse by its rival UBS. | Investors have already been spooked by the collapse of two US banks and the rushed takeover of Swiss giant Credit Suisse by its rival UBS. |
| Stock markets in London, Germany and France were all lower. | Stock markets in London, Germany and France were all lower. |
| Other banks to see hefty share falls included Germany's Commerzbank, down 8%, and France's Societe Generale, which fell 7%. In the UK, Barclays and NatWest were both down by about 6%. | |
| Russ Mould, investment director at AJ Bell, told the BBC that the drop in Deutsche Bank's share price, and a sharp jump in the cost of insuring against a possible default by the bank, was "indicative of a wider loss of confidence in the banking sector". | |
| "There's a gathering fear that central banks may have overdone it with interest rate increases, having left them too low for too long," he said. | "There's a gathering fear that central banks may have overdone it with interest rate increases, having left them too low for too long," he said. |
| Central banks slashed interest rates during the global financial crisis, starting in 2008, as part of efforts to encourage economic growth. | |
| But over the past year or so banks have been raising rates sharply to try to tame soaring price increases. | |
| These rate rises have hit the value of even safe investments that banks keep some of their money in. This has unnerved investors, triggering share price falls across the sector. | |
| Higher interest rates have also raised the possibility of recession, Mr Mould said, and if that happens, "banks will generally find it pretty hard going". | |
| Bloomberg News also reported that UBS and Credit Suisse were being investigated by the US Department of Justice into whether they had helped Russian oligarchs avoid sanctions. | Bloomberg News also reported that UBS and Credit Suisse were being investigated by the US Department of Justice into whether they had helped Russian oligarchs avoid sanctions. |
| Mr Mould said this news was "clearly unfortunate" and "not ideal timing" given the UBS takeover of Credit Suisse. | Mr Mould said this news was "clearly unfortunate" and "not ideal timing" given the UBS takeover of Credit Suisse. |
| Central banks and governments have been trying to calm investor worries after the collapse of the Silicon Valley and Signature banks in the US, and the takeover of Credit Suisse by UBS to shore it up. | |
| In a speech on Tuesday, US Treasury Secretary Janet Yellen said "the situation is stabilising, and the US banking system remains sound". | |
| On Friday, Bank of England governor Andrew Bailey told the BBC that the UK banking system was "safe and sound". | |
| Related Topics | Related Topics |
| Deutsche Bank | |
| FTSE 100 | FTSE 100 |
| Stock markets | Stock markets |
| UBS | UBS |
| Banking | Banking |
| Credit Suisse | Credit Suisse |