Opinions diverge on this. The California-based Silicon Valley Bank is the biggest US bank collapse since 2008, and Credit Suisse has joined peers that were sold at fire-sale prices during the financial crisis.
Shane Oliver, the chief economist of financial services company AMP, says while the bank failures do not look like a rerun of the 2008 crisis, they do represent contagion risks.
Investors have been selling down regional US banks, in particular, over concerns they might have balance sheets that resemble SVB's finances.
But other parts of the market, including US tech stocks, have held up well during a volatile few weeks, indicating some investors expect the threat of a banking crisis to subside.
It is clear, however, that the speed of the demise of SVB, and then Credit Suisse, has spooked bank investors and customers.
How are central banks trying to avert a meltdown?
This story is from the March 24, 2023 edition of The Guardian Weekly.
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This story is from the March 24, 2023 edition of The Guardian Weekly.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
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