Bank woes bode ill for world economy as talk of another global financial crisis gains traction
Bank of Japan’s decision to introduce negative interest rates, pay and hiring freezes at major lenders, and slower growth in China hit investor confidence
All is not well in the global financial sector. Worldwide lenders have come under increasing pressure from the recent market turbulence. Can this be a sign of another financial crisis brewing on the horizon? UBS, the Swiss banking giant, has announced a freeze on salaries for its 5,200 investment bankers until at least the middle of this year.
The share prices of HSBC and Standard Chartered, two of Hong Kong’s note-issuing banks, have lost a third and three-quarters respectively in the past year and a half. Share prices of European and Japanese banks have taken a heavy beating so far this year, though the former recovered somewhat late this week.
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The Nikkei index has fallen more than 15 per cent so far this year as it has been hit by worries about dismal corporate earnings, China’s slowing growth and sliding crude oil prices.