Brussels: Europe and the Arabs
The British media paid attention to the warnings issued by a number of leading economists in the world that the failure of the "Silicon Valley" bank and the problems in the Credit Suisse bank; They pose a threat to the global financial system, amid fear of "something big" happening.
Shares of "Silicon Valley" bank fell and "Credit Suisse" bank was exposed to "tremors" or "signs of something big," according to the British newspaper "Express".
 
Shares of Silicon Valley Bank in the United States fell last week after it suffered losses in government-backed bonds, which depreciated due to high interest rates.
 
Credit Suisse also saw its shares plunge this week and had to turn to the Swiss Central Bank for emergency credit.
 
Fears that the economy may be on the verge of another "crisis like 2008" caused shares of major European banks to fall, and the FTSE 100 index in London's Stock Exchange fell to its lowest level this year.
 
Financial analysts say that the selling of stocks is fueled by investors' fears that banks have taken additional risks to increase investment returns during years of very low interest rates, and some may have failed to protect themselves from the deterioration of these holdings with high interest rates.
 
Sambit Bhattacharya, Professor of Economics and Head of Economics at the University of Sussex Business School, was quoted as saying: “Credit Suisse is a fairly large organization with a revenue base of approximately US$16 billion. to eight trillion US dollars.
 
He added: “Simple math indicates that the financial system must be able to absorb such losses.
However, history suggests that it is difficult to predict the effects, it is indeed a threat but how severe it is will only tell with the passage of time.
 
A financial crash similar to the one we witnessed in 2007-2008 is possible, says Bhattacharya, but any prediction at this point would be a mad game.
 
"We don't have enough publicly available data to make a call about the situation with respect to banks and their interdependence. In fact, trading in derivative contracts has multiplied several times since the 2007-2008 crisis," he added.
 
On his comprehensive assessment of the global financial system, Professor Bhattacharya said: "These signs are worrying. They could be tremors or they could be signs of something big. We will find out one way or another over the next few weeks."
 
Meanwhile, the European Central Bank continued to hike interest rates aggressively on Thursday, brushing aside expectations.
 
The European Central Bank raised interest rates by half a percentage point, as it continues to fight high inflation.
Source: Middle East News Agency