LONDON (Archyde.com) – Investor confidence fell to a 20-year low after turmoil over U.S. banks and renewed recession fears this month, according to a monthly Bank of America survey. It is shown that the level has fallen.
BofA’s own “financial market risk index”, which measures investor anxiety, jumped to 7.7, indicating a dramatic deterioration in risk levels. It was slightly below its 2022 surge on the back of the Ukrainian conflict, but above the peaks of both the financial crisis and the coronavirus pandemic.
The investigation was conducted after the collapses of Silicon Valley Bank and Signature Bank, and before UBS’ decision to buy Swiss financial giant Credit Suisse (CS) on March 19.
European fund managers are particularly pessimistic.
Although the survey was conducted before UBS’s decision to buy CS, nearly a third said a “systemic credit event” was the biggest risk to the market. That’s up from just 8% in February this year.
Inflation dropped out of the top risk factor for the first time in nine months. The US “shadow banking” sector was cited as the most likely risk factor.
The risk of recession and stagflation also increased again.
A monthly survey by Germany’s European Economic Center (ZEW) also showed a sharp drop in investor sentiment.