Since the great financial crisis of 2008, the bad reputation of the financial sector has been a fixed fact. Public opinion ended up considering him responsible for the great economic misfortune of those years; but investors have remained on alert ever since, ready to stampede at the slightest hint of complication. Now, cryptocurrencies, in the case of the Silicon Valley Nak (SVB) first, and the long Credit Suisse crisis, now gripped by the announcement by its first shareholder, the Saudi SNB, that it has grown tired of losing money in the big Swiss bank and that they do not count on it to cover their gigantic losses in recent years, have unleashed a new storm that unleashes on the whole of banking, despite the positive expectations that it had aroused thanks to the rise in interest rates.
Two episodes that are disconnected from each other, that of the Californian bank and that of the Zurich giant, but that cause the same feeling in investors, distrust: banking and finance are not what they say or what they seem. For not knowing, not even the central bankers know for sure what the guts of the banking giants are like and, above all, what is hidden behind their long shadow of activities that do not appear in their public balance sheets. It is about more than 230 trillion, three times the world gross domestic product (GDP), which practically moves without the control of governments or regulators. And the party is already served in the markets, sales of bank shares without discrimination. Who will be dragged down by the Credit Suisse crisis?
Global banking – a concept that no longer refers to the classic banking that we all know, the one that manages deposits and gives simple loans to companies and families, like most Spanish banks and that is now a drop in the ocean – have It went on its own, speculating on cheap money and placing its delayed financial bombs under any speculative activity likely to offer high returns. After a decade of wine and roses with negative interest rates, the speculative mountain has reached colossal dimensions. But no one, including the big central bankers, is capable of knowing where this snake of chained debts runs, whose final destination has been the pyramidal orgy of cryptocurrencies; or the real estate activity in shopping centers that caused the collapse of a Blackstone fund; or the LDI (liability-driven investing), which brought down the private pension funds in the United Kingdom, forcing the Bank of England to organize their rescue with an emergency plan.
As always, when the time comes to pay the debts is when all the crap comes out and recognizes that you don’t have what seemed guaranteed before. It is the mirage of speculation. And that moment of truth has been the rise in interest rates caused by the turn of the Fed and the ECB to control inflation.
Investors know that this domino is unpredictable and that is why they react by selling the shares of the vast majority of banks. Who assures them that what they now have in their portfolio will not have financed any of their now fallen colleagues; Or any of the companies or sectors in bankruptcy? Of course, neither in the public balance sheets, nor in the declarations before the regulators, nor in the inconsequential shareholders’ meetings, they will find out anything.
In any case, today there is no need to be tremendous. At the end of the day, some government announcement will calm the markets. Also in this fourth great warning of financial instability. In all these episodes, the governments and central banks have ensured that everything was under control and that there would be no surprises. But crises follow one after another. And its dimensions are always larger than in the past. The authorities have not been able to avoid them and have inevitably ended up resorting to emergency measures, with the common characteristic of using public resources to deal with them. Until one day, nothing will be enough. As it happened in September 2008. The snake continues to agitate.
