What happens to my stocks in the banking crisis?
A US regional bank has collapsed and bank stocks are down 8–25%. Here's what's really happening, whether your deposits are safe, which stocks are affected and three steps you should take today.
Key facts
- Deposits at German/Austrian banks are guaranteed by law up to €100,000 per person per bank (deposit insurance).
- Trade Republic holds cash with Deutsche Bank and Citibank — your deposit is protected up to €100,000 by German deposit insurance.
- Stocks are protected assets — even if your broker goes insolvent, your stocks remain your property.
- On bank stocks themselves: selectivity matters. Large universal banks (JPMorgan, Goldman Sachs, BNP Paribas) are well-capitalised. Regional banks are the weak spot.
- Historically: SVB collapse 2023 — S&P 500 recovered in 6 months, JPMorgan even rose 40% in 12 months.
Potential winners
Stocks that typically outperform during banking crises — big banks and safe haven:
Stocks under pressure
Stocks under pressure — regional banks and financials with high valuation risk:
What you should do now
Check deposits stay under €100,000
Per bank per person, €100,000 are legally protected. If you hold more cash at one bank: split across two. At Trade Republic / Scalable / Flatex: no worry below €100k; park the rest in a second bank's instant access account.
Understand stocks are protected assets
Stocks ALWAYS belong to you, even if the broker goes bankrupt. They sit in a custody account at a depository (e.g. Clearstream) and are only managed on your behalf. A broker insolvency is annoying (transfer takes time) but never a total loss.
Look at bank stocks selectively
Not all banks are equal. JPMorgan and Goldman Sachs have Tier-1 capital ratios >12% and diversified business models. Regional banks often have concentration risk (e.g. commercial real estate). If you want banks: only top-3 per region.
Have crisis cash ready, don't build it now
5–15% cash ratio is ideal — but don't build it via fire-sales. Use savings rates and dividends to slowly raise the ratio. That way you have options at the next sale without panic-selling.
Recommended brokers — low-fee, no order commissions
If you want to act on these recommendations, you need a broker with low fees, fractional shares and free savings plans. These three are our top picks:
- 1€ pro Trade
- Kostenlose Sparpläne
- 3.25% Zinsen auf Cash
- Einfache App
- Flatrate-Modell für Vieltrader
- Xetra-Zugang
- Kostenlose Sparpläne
- Prime+ mit Zinsen auf Cash
- 150+ Börsen
- Professionelle Tools
- Günstigste Gebühren für Vieltrader
- Hohe Zinsen auf Cash
FAQ — Common questions in this crisis
Is my money safe at Trade Republic?
Yes. Trade Republic holds cash via Deutsche Bank, J.P. Morgan SE and Citibank — all deposits are protected by German deposit insurance up to €100,000 per customer. Stocks and ETFs are protected assets and belong to you regardless of the broker.
What happens to my portfolio if the broker fails?
Stocks, ETFs and funds are protected assets and don't become part of the insolvency estate. They're transferred to another broker or made available to you directly. Cash on the settlement account is protected by deposit insurance up to €100,000.
Should I buy JPMorgan or Goldman Sachs now?
Both have outperformed in the last 3 banking crises (2008, 2020, 2023). JPMorgan P/E ~12, Goldman P/E ~13 — historically cheap. But: buy in tranches over 4–8 weeks, not all at once. A 3–5% position is enough.
Should I sell bank stocks across the board?
No, not blanket. If you hold JPMorgan, BNP or Goldman Sachs: stay calm, these are the winners of such crises. If you hold US regional banks or small German private banks: review the position, possibly reduce. Never sell everything in the first 48h of a crisis.
What about bond ETFs in a banking crisis?
Government bond ETFs (e.g. iShares Euro Govt 7-10y) often benefit as investors flee to safe havens and the ECB might cut rates. Corporate bonds suffer more. 10–20% bonds in a portfolio makes sense as a crisis buffer.