Equity markets were blocked by regional bank tensions in the US.

The session of losses for European stock markets, with the Ibex-35 down 0.36% at 9,043 points following the European Central Bank’s (ECB) decision to raise interest rates. It could have been worse. The indicator lost more than 1% in the most tense moments of the day, below 9000 points, with investors paying particular attention to what is happening on the other side of the Atlantic, where tensions with US regional banks remain at a very high level. This situation undoubtedly affects the price of the sector in Europe, with large losses for Ibex banks as well. Unicaja lost more than 3% on Thursday, followed by Sabadell and Santander, which left more than 2% behind. BBVA, CaixaBank and Bankinter also reached the red, although ArcelorMittal and Aena were the most dangerous values ​​with losses of 5% and 3.2% respectively.

Two new victims The market is extremely worried. Especially on Wall Street, where the President of the Federal Reserve (FED) Jerome Powell surprised on Wednesday by reducing the tension by assuring that since March the financial situation has returned to normal. A few words that come just days after the collapse of First Republic Bank and with a focus that is now pressuring others two entities in the country: PacWest and Western Alliance. The former – headquartered in Beverly Hills and 70 branches across the US with $44 trillion in assets – collapsed 50% at the close of European markets, extending its collapse to more than 71% in just six sessions in which its stock market value was with 11.08 euros fell to 3.2 euros.

The tension is such that the entity was forced to issue a statement guaranteeing that it “has not experienced unusual deposit flows following the sale of First Republic Bank and other news.” «Our liquidity remains strong and they exceed our unsecured deposits,” he insists. But rumors about possible asset sale or capital increase investors were put on alert.

The same thing that happened with Western Allianzbased in Arizona, the stock market sank more than 41% after Financial Times announce that he is also studying you are selling your business. “It is shameful and irresponsible,” the entity said in a statement, referring to the article. In any case, everything indicates that it is dripping victims inside the US regional bank will continue in the coming weeks, in a kind of concentration process which could even be positive for the Fed. The greater the tension, the greater the credit contraction, greater economic cooling and thus less pressure in the fight against inflation. ‘Side B’ is the risk of recession. “Renewed banking tensions add another layer of uncertainty to an already complex outlook,” explained Fidelity analysts. “We believe that a cyclical recession is still the most likely scenario,” they added, referring to the US.