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Investors lack confidence after SVB and Credit Suisse falls

Investors are jittery after the collapses of the banks SVB and Credit Suisse, with half (49%) saying they have less confidence in the banking sector as a result.

Even more (55%) are worried that these events will further harm the UK’s faltering economy, research from Shojin has revealed.

Jatin Ondhia, chief executive of Shojin, said: “The banking collapses of recent months have added doubt and uncertainty to an already testing economic climate, with runaway inflation and rising interest rates posing questions for investors and their portfolios.

“Our research shows that UK retail investors are wary of how the shockwaves from a banking crisis could impact both their investments and the wider economy.

“Crucially, Shojin’s study highlights some of the actions that retail investors are taking amidst this turbulence in the banking sector. For one, diversification is clearly going to be a key trend – investors are likely to rebalance their portfolios in the coming year.

“What’s more, the research suggests many will look towards alternative asset classes rather than traditional ones in a bid to diversify their investments.”

Credit Suisse has been rescued after the Swiss bank was bought by rival UBS.

However the move means £17bn of bonds held by investors have been renedered worthless.

Similarly the collapsed Silicon Valley Bank (SVB) has been purchased by rival First Citizens BancShares.

A third (32%) of retail investors saw their investments negatively impacted by the banking collapses.

Nearly half (44%) of investors are less confident in traditional investment classes than they were a year ago, while a third (36%) say alternative asset classes are likely to play a bigger role in their investment strategies.

This is particularly true for younger investors, with the figure rising to 55% amongst those aged 18-34.

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