The ECB is not worried about the Credit Suisse crisis and is tightening interest rates

There is no doubt that they are resounding blows Silicon Valley Bank (SVB) and Credit Suisse in this last week they will have consequences, apart from the multi-million losses they have inflicted on publicly traded banks – in the Ibex 35, only Santander and BBVA are recovering this Thursday-.

The Swiss authorities came to the aid of the entity that requested 54,000 million euros of liquidity to avoid closure, and supervisors are looking at the balance sheets of other European banks. And, despite everything, the European Central Bank (ECB) refused to change his road map this Thursday.

The organization, headed by christine lagardedoes not detect systemic problems that could indicate a chain crisis, so it decided to step on the gas and raise prices again. Interest rates half a point to 3.5%, as he expected before the banking turmoil broke out. Frankfurt does not want to incite panic. The message is unequivocal: there is no problem there.

As the Frenchwoman clearly warned at the last meeting, she will do “whatever it takes” to tame herself inflationthe most serious latent problem facing the Eurozone.

Prices are less and less sensitive to the tightening of monetary policy. In fact, they closed February 8.5% higher than the same period in 2022 in the bloc, and in countries like Germany, food prices continue to rise at an accelerated pace. There are fears that high levels of inflation will become chronic, leading European economies to a scenario of business closures and higher unemployment.

However, investors are beginning to show signs of nervousness about the fallout from the upswing of the past eight months. If credit stops flowing into the economy and companies cannot continue to refinance their debts, delays and defaults will knock on the banks’ doors sooner rather than later.

Is there an imminent danger of a crisis? The ECB is ruling it out, although it has asked eurozone banks to review their exposure to Credit Suisse. The sector itself wanted to call for calm, ensuring that neither the problems nor the business model of a Silicon Valley bank or a Swiss bank had anything to do with those of entities overseen by Frankfurt.

Euribor fell to 3.359 percent

Even the banks themselves did not foresee the ECB’s maneuver, which is shown by the sharp decline euribor daily – the index consists of the interest that subjects charge each other for borrowing money -. It fell to the 3.359% threshold this Thursday, bringing the monthly average down to 3.785% and giving Spanish mortgage borrowers a breather with variable-rate loans.

Analysts interpret that the ECB wanted to stay the course, waiting for events and whatnot Federal Reserve American next week. There is growing pressure for the North American regulator to delay raising interest rates so as not to exacerbate the problems of its regional banks. However, the authorities have created a recovery fund to inject liquidity into entities that need it.