Equity funds exposed to the 2023 banking crisis

1 min Read Published: 21 Mar 2023

The failure of SVB and the subsequent crash in banking stocks sent shockwaves through the global banking sector as explained in my newsletters titled "Banking blow-up" and "That escalated quickly". Since those newsletters, the situation has continued to evolve quickly with UBS buying Credit Suisse in a deal sanctioned by central banks.

Prior to the deal the Stoxx Europe 600 Bank index had fallen 16% between 8th March, when the banking turmoil first started, and the 17th March. Yet this masks some significantly larger moves. In the US, the index tracking bank stocks in the S&P 500 was down 18% over the same period. But the broader market has been hit as well since the banking crisis started. 

With still so much uncertainty around possible contagion within the banking sector some investors have become increasingly wary of the risks associated with investing in bank stocks.

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