Dow plunges 160 points amid panic that Deutsche Bank could be next to go after shares tumbled 14%
Dow swings more than 200 points as Wall Street is rocked by volatility amid panic that Deutsche Bank could be next to fall after shares of the European beast plunged.
- Dow Jones Industrial Avera swung more than 200 points today, sending panic on Wall Street
- Concerns are mounting that Deutsche Bank could be next to fall after its shares fell 19 percent this morning.
- Treasury Secretary Janet Yellen today called an emergency meeting for top US financial regulators that will be closed to the public.
Wall Street suffered a volatile day on Friday as shares rose more than 200 points amid concerns that Deutsche Bank could be next to fall.
The Dow Jones industrial average plunged 223.79 points at 9:45 a.m., though it recovered quickly and was up 16.13 points at 1 p.m.
Global bank stocks and broader markets have been rocked since the sudden collapse of Silicon Valley Bank (SVB) and Credit Suisse in scenes reminiscent of the 2008 financial crisis.
Concerns were raised on Friday that Deutsche Bank, one of Europe’s biggest lenders, could be next after shares fell 19 percent this morning.
It was triggered by the rising cost of insuring the bank’s debit, which reached a high of more than four years.
The European market is particularly sensitive after Credit Suisse was forced to buy last week, making bondholders nervous.
Panic broke out on Wall Street today as stocks swung by more than 200 points
However, analysts moved to reassure markets by insisting that Deutsche “is not the next Credit Suisse.”
His words seemed to calm nervous lenders when Deutsche Bank shares rose later in the day. As of 12:30 pm ET, they were at -4.65 percent.
In the US, bank shares looked slightly more stable.
On Friday afternoon, Bank of America shares were down 0.61 percent, JPMorgan was down 2.18 percent, Citigroup was at -2.42 percent and Wells Fargo was down 0.5 percent.
However, Treasury Secretary Janet Yellen called an emergency meeting for top US financial regulators today to discuss the turmoil in Europe.
The meeting will include the Financial Stability Oversight Board and will be closed to the public.
It is not clear if a statement will be issued after the meeting.
US financial regulators are under pressure to reveal how they intend to guarantee uninsured bank deposits following the collapse of Silicon Valley Bank (SVB).
Analysts moved to reassure the market by insisting that Deutsche Bank is “not the next Credit Suisse” amid concerns it could fail soon.
Policymakers have emphasized that the turmoil is different from the global financial crisis of 15 years ago because banks are better capitalized and funds more readily available.
But this failed to stop a sell-off in bank stocks and bonds, and rising financing costs in fixed-income markets added to the banking sector’s woes and clouded its earnings prospects.