ECB convenes extraordinary meeting to discuss banking turmoil

The European Central Bank (ECB) convened an extraordinary meeting of the supervisory board for this Friday to discuss the turmoil that began in the US banking sector but also spread to European banks, it was announced.

“The board meets to exchange views and inform members about recent developments in the banking sector,” a spokesman was quoted as saying by German media and Agence France Presse.

At the beginning of the week there had been an extraordinary meeting due to the turmoil in the banking sector that stirs memories of 2008 when troubles in the US led to a global financial crisis.

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Now in the US, regional bank First Republic found itself in a tight spot as customers withdrew large chunks of their deposits, raising concerns after the collapse of Silicon Valley Bank on March 10 and Signature Bank on March 12.

In Europe, the Swiss bank Credit Suisse has been in trouble and received a liquidity injection of 50 billion Swiss francs of the Swiss National Bank to overcome liquidity difficulties.

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Credit Suisse is one of the 50 banks considered “systemically important” by the international financial system.

There is Contagion fears and confidence crisestion that can lead to withdrawals of deposits, which can drag down other banks.

On European stock markets, bank shares are trading at their lowest levels since the start of the turmoil.

Despite the critical situation, the ECB maintained its line of interest rate hikes on Thursday and raised them by half a percentage point.

ECB President Christine Lagarde acknowledged that some members of the Governing Council had voted against the decision and would have preferred to wait for the situation in the banking sector to evolve.