Eurozone banks share a plunge as the Ukrainian crisis shakes markets


Eurozone banks’ share fell sharply on Thursday after Russian troops launched a major attack on Ukraine and European Union officials announced new sanctions in Moscow.

European banks, especially those in Austria, France and Italy, are the most exposed to Russia in the world. In the weeks leading up to the start of Thursday’s multifaceted military action against Ukraine by Russian troops, they fear that the aggression will cause severe sanctions that could have a more widespread impact on their activities and financial stability. I’ve been trapped.

The Eurozone Banking Index reflects the performance of the largest banking sector companies in 19 European countries that share the euro, dropping 8.6% by 11:13 am New York time to all profits in 2022. Was erased.

UniCredit led the loss of Italian banks, with stock prices plummeting 13.5% by 11:38 am New York time.

Unicredit Told reuters On Thursday, its Russian sector had a very high allowance for doubtful accounts, covering 84% of bad debts and was “very liquid and self-funded.”

“Our capital in our Russian subsidiary is less than 4% of the group’s total capital, and even less when looking at loans and total assets,” UniCredit told the outlets.

For Russia’s military action, the European Central Bank (ECB) worked with lenders operating in Russia to assess different risks from different scenarios such as liquidity, loan books, trading positions and business continuity. It is reported that. , Including intrusion, According to Bloomberg..

Members of the ECB’s decision-making board were scheduled to meet in Paris on Thursday for what is called an “informal gathering” on the eve of the European Union Finance Ministers’ meeting on Friday. However, the rally, which begins around lunch and ends around 10 pm local time, could turn into a crisis meeting as policymakers digest news of aggression and diminish potential economic implications. There is sex.

“In my view, it will have a short-term inflationary effect, which means that rising energy costs will raise prices,” ECB policymaker Yannis Stournaras told Reuters.

“But in the medium to long term, I think deflation will occur through negative trade impacts and, of course, rising energy prices,” he added.

Russia’s stocks were hit, the country’s currency fell to record lows against the dollar, and Russia’s central bank urged to announce emergency relief measures as news of military action came up on Thursday. it was done.

The Central Bank of Russia has announced an emergency assistance package to increase liquidity in the market and respond to foreign currency market intervention.

“To stabilize the financial market situation, the Bank of Russia has decided to start intervening in the foreign exchange market … and today it will carry out operations to provide additional liquidity to the banking sector.” And the central bank Said in a statement..

He added that he is ready to implement “all the tools he needs” to maintain business continuity and prevent financial instability.

Russia’s dollar-denominated RTS index fell 39.44 percent to 742.91 points by 11:59 am New York time, while the ruble-based MOEX Russia index fell 33.28 percent to 2,058.12 points.

Russian banks, metal exporters and major commodity companies all plummeted, and shelter assets such as gold and bonds flowed in.

Tom Ojimek

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Tom Ozimek has a broad background in journalism, deposit insurance, marketing and communication, and adult education. The best writing advice he has ever heard is from Roy Peter Clark.

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