Oil prices ended sharply lower on Tuesday, at the lowest level in the last four months, as traders remained worried about a possible recession after the tightening of monetary policy, which is creating the first turbulence in the US banking sector, writes AFP.

• The price of a barrel of Brent North Sea oil for delivery in May fell by 4.11% and closed at $77.45.
• US West Texas Intermediate (WTI) crude for April delivery fell 4.63% to $71.33.

The bankruptcy of US Silicon Valley Bank (SVB), caused by massive customer withdrawals, has reignited the specter of a “bank run” or banking panic. Banks and the government are far from powerless in the face of this risk, writes AFP.

Despite the tightening of the rules, panic can never be completely ruled out, so in recent days there have been reassuring words from the authorities.

Thus, according to the European Commissioner for the Economy, Paolo Gentiloni, there is no “significant risk” of infection in Europe; According to the Bank of France, French banks are “not inclined” to SVB, while President Joe Biden said Americans can “trust” a “solid” banking system and will do “whatever it takes” to keep it that way.

In response to questions from AFP, the Bank of France said it had “all the (cash, not) reserves needed to deal with peak demand”.

And if that’s not enough to reassure people, authorities have “considerable discretion” to avoid a domino effect, Wechter noted.

That’s why Treasury Secretary Janet Yellen, the US Central Bank (Fed) and the Federal Deposit Insurance Corporation (FDIC) decided on Sunday to allow SVB customers to withdraw all their deposits.

In addition, the Fed promised to lend the necessary funds to other banks that would need them to fulfill their customers’ withdrawal requests. “The rules are designed to be changed when there is systemic risk,” Duard says.