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Saturday, July 13, 2024

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HomeNewsAn irrational market? You...

An irrational market? You don’t say?

This is an opinion piece by our Analyst Team.

We had to laugh – you have to at times like these – when the Citibank team are quoted by Bloomberg, reacting to the sell-off in Deutsche Bank shares thus:

“We view this as an irrational market,” Citigroup Inc. analysts including Andrew Coombs wrote in a note. “The risk is if there is a knock on impact from various media headlines on depositors psychologically, regardless of whether the initial reasoning behind this was correct or not.”

We firmly agree here at Global Banking Monitor Towers. Indeed, the dangerous reality is that negative sentiment mixed with popcorn-munching ‘doomscrollers’ desperate excited for the next Credit Suisse, cause yet another unwarranted bank run.

We aren’t living in the 1900s. Whisper the phrase ‘bank run’ like Bart Simpson does (video in our recent opinion post) and, there’s a strong risk that customers with lots of money in Deustche decide to ‘play it safe’ and move their money… too…. er… something that isn’t owned Deutsche and something that feels more better (that’s a W1A reference).

Yes we know that ChatGPT wouldn’t like those last two words paired together. Neither does Grammarly. But ‘like that speak’ in these current times. As we saw very effectively with Silicon Valley Bank, digital banking capabilities of today mean that you don’t need to lift much more than a finger to move your money: Just hit transfer. Just in case.

So we applaud the Citibank commentary. We think the market needs a bit more level heads at the moment.

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