No one in the British government's Treasury department had expected March to be easy. Last Monday's economics-heavy review of defence and foreign policy, and the budget that followed two days later, meant that a tough week for its mandarins had already been priced in.
But none of them expected to have to sell a bank for £1 ($1.20).
That happened last Monday, when Treasury and central bank officials eventually brokered a deal for HSBC to buy the UK arm of Silicon Valley Bank (SVB UK) for a nominal fee - following the collapse of SVB's California parent.
However, a frantic weekend spent trying to salvage the bank, on which much of Britain's tech sector depended for cashflow, turned out to just be the "warmup act in some ways", according to a senior Whitehall official.
The SVB deal in the UK only provided a respite before a week from hell unfolded, culminating in a rescue operation for Switzerland's secondlargest lender, Credit Suisse, in an attempt to avoid a re-run of the 2008 banking crisis.
On Monday this week, banking shares fell in London and across Europe after the purchase of Credit Suisse by rival Swiss bank UBS failed initially to calm markets. The jitters were partly prompted by the terms, which saw holders of $17bn of Credit Suisse's bonds wiped out, while equity investors were not as badly affected.
Central banks took coordinated action last Sunday to try to shore up confidence by agreeing measures to ensure banks in Canada, Britain, Japan, Switzerland and the eurozone had the dollars needed to operate.
The US Federal Reserve, the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank and the Swiss National Bank announced they would boost liquidity through daily US dollar swaps. The change was a modest expansion of an existing programme in which the Fed each week pays dollars to other central banks in exchange for local currency.
Bu hikaye The Guardian Weekly dergisinin March 24, 2023 sayısından alınmıştır.
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Bu hikaye The Guardian Weekly dergisinin March 24, 2023 sayısından alınmıştır.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Giriş Yap
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