Markets have been making headlines for all the wrong reasons recently
The stock markets have been making headlines for all of the wrong reasons recently but, thankfully, stocks around the world have bounced back.
Governments in the U.S. and U.K. have reassured investors about the stability of banks following a string of banking failures.
These failures were triggered by depositors rushing to withdraw money after anxiety over the banks’ financial health.
In the UK, the FTSE closed 1.79 per cent higher after gains in top bank shares.
Chancellor Jeremy Hunt told MPs Britain’s financial system is “fundamentally strong” after facing questions from Labour’s shadow chancellor Rachel Reeves.
Reeves asked whether the system is “adequate to protect taxpayers and depositors” and if the government can be confident that no other U.K. banks are vulnerable to failure after Silicon Valley Bank collapse.
There has also been further instability, with Credit Suisse having to be rescued by rival UBS.
But, while Hunt says the markets are unsettled, he is certain the U.K. financial system can ride the wave.
“We have a robust plan to deal with the globally significant banks that would cause a danger to our stability if they were allowed to fail,” he said.
“There are procedures in place and we haven’t yet had to test those procedures, even though one of those banks has been bought by another.”
