Banking crisis 2.0

If the economy coughs, the banks will have pneumonia. That was the message from the markets at the beginning of 2016, when fears of recession led to the collapse of bank stocks.

Between November 2015 and January 2016, the Euro STOXX stock index fell by 10.5%, while the index for financial stocks included in it fell by 13.6%. The development in the USA was similar. During this period, the S&P500 Composite Index fell by 7.8% and the corresponding index for financial stocks by 10.5%.

The overall decline in equity prices was triggered by concerns about the economy against the backdrop of China's weakness and the US Federal Reserve's interest rate hike in December. The markets seem to think that banks are particularly susceptible to recessions. At times, a real flight from bank shares developed in the markets.

Please note: This study is available in German only.