US stock markets just closed slightly up after another tumultuous week for the market. US stocks seemed to shake off hits to shares of Deutsche Bank, which were down over 8% by the end of the day and sparked concern over banking fear contagion. Still US stocks closed higher on Friday, with Dow up 0.41%, S&P 0.5% and Nasdaq 0.3%.
Coming up next week, top federal bank officials will be testifying in two back-to-back hearings in front of the Senate and House, on Tuesday and Wednesday respectively, as lawmakers dig into what happened with the collapse of Silicon Valley Bank.
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A group of Citibank analysts said that the fall of Deutsche Bank shares today was “irrational”.
“We view this as an irrational market,” the note said. “The risk is if there is a knock-on impact from various media headlines on depositors psychologically, regardless of whether the reasoning behind this was correct or not.”
The statement hits at the nature of panic in the banking industry – a lot of it bred on feelings of fear over substantive reasoning. This is why officials, including German chancellor Olaf Scholz, spent much of today trying to maintain trust in the banking system.
“Deutsche Bank has fundamentally modernized and reorganized its business model,” Scholz said. “It is a very profitable bank, and there is no reason for concern.”
