Insolvency of the financial services provider Silicon Valley Bank
Last week, the financial services provider Silicon Valley Bank (SVB) was declared insolvent in the USA.
This is the second largest bank collapse in the USA since the insolvency of the Washington Mutual savings bank in 2008. This event caused stock markets, and the banking sector in particular, to come under pressure worldwide. The extent and further consequences are difficult to assess. However, we assume that this could have negative consequences for other financial institutions and advise against investments in bank shares. We have fundamentally avoided bank shares for months and years.
We continue to maintain the strong underweight in shares as part of a balanced strategy and recommend additional hedging of the share component in the interest of asset protection.