Fed official flags possible rise in banking stress

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Fed official flags possible rise in banking stress

A U.S. Federal Reserve official said on Sunday that stress in the banking sector is being closely monitored for its potential to trigger a credit crunch, as a European Central Bank official also flagged a possible tightening of lending.

Following the collapse of Silicon Valley Bank SVB and Signature Bank in the United States, authorities around the world are on alert for the fallout from the rescue takeover of Credit Suisse a week ago.

The financial market stress indicators were flashing last week. The euro fell against the dollar, euro zone government bond yields fell and the costs of insuring against bank defaults surged despite assurances from policymakers.

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