The intervention of the Californian bank Silicon Valley Bank (SVB) by the US authorities after his debacle in the NYSE has caused a 27% rise in the index VIX volatility gauge, also known as the fear meter in Wall Street.
The SVB debacle, which despite being a bank with offices in only two states (California and Massachusetts)has awakened fear of some investors to constitute the prologue of a new crisissince it is considered the biggest bank failure since the 2008 crisis and one of the most important in the history of the United States.
However, others see his fall as something that responds to the idiosyncrasy of this company, which opted during the pandemic to invest in long-term Treasury Bonds and venture capital companies. The truth is that it has dragged down other banks such as Signature Bank, First Republic Bank, Western Alliance or PacWest and has affected large corporations finance both within the country and abroad.
The VIX, which had not reached such high levels since last October, is also known as the fear index because it measures expectations of volatility and uncertainty of investors and serves as a tool to understand market sentiment. When the VIX is low, it suggests that investors are relatively optimistic and more confident in future market conditions.
