A recovery in U.S. markets, especially in beaten-down bank shares, lifted Asian stocks on Monday while the safe-haven dollar declined. Australian stocks outperformed, boosted by M&A activity.
The relief rally in Asian equities could extend to Europe, where banking shares rose on Monday, paring last week’s sharp declines.
A state-orchestrated rescue of Credit Suisse by rival UBS and turmoil among regional U.S. banks have fuelled concerns for the sector.
But analysts at asset manager Amundi say recession fears are the main culprit and European banks are not lumbered with weak assets that would pose challenges to capital or liquidity levels.
While the analysts expect a continuation of declining credit growth which is consistent with monetary tightening, they don’t expect any credit crunch.
“Most European banks have plentiful capital and liquidity to support the real economy: We expect them to remain open for business and to continue extending loans to creditworthy customers.”
The European Central Bank’s board member Isabel Schnabel said on Monday the ECB could take a leaf from the Bank of England’s book as it looks for new ways of managing liquidity in the banking sector and steering short-term interest rates in the market.
In Germany, millions of people were disrupted on Monday as airports and bus and train stations across the country came to a standstill during one of the largest walkouts in decades in Europe’s biggest economy as soaring inflation stoke wage demands.
Meanwhile, a U.S. regulator sued Binance, the world’s biggest crypto exchange, and its CEO and founder Changpeng Zhao for what the regulator alleged were an “illegal” exchange and a “sham” compliance programme. Zhao called the complaint “unexpected and disappointing.”
/cloudfront-us-east-2.images.arcpublishing.com/reuters/JVJBHEMX3JLE7I3ZBJO5M4MYFM.jpg "Calm returns: Investors switch to bank fundamentals 29")
