What is it about March? October, the month of the 1929 Wall Street crash and the crash of 1987, is often cited as the most dangerous for investors. Yet in the past three crashes or bear markets it has been March which saw the worst. The FTSE bottomed out in March 2003, shortly before the Iraq invasion, then again in March 2009, just as the Bank of England began its quantitative-easing programme. Then it happened again in 2020 when markets sank due to Covid – they staged a miraculous recovery on the very day that the first lockdown began in Britain.

Many investors will be asking whether SVB’s collapse has brought forward the expected peak in interest rates

Is history about to repeat itself? Markets in Britain and around the world have taken a battering over the past week thanks to the collapse of Silicon Valley Bank and associated fallout. According to one estimate doing the rounds this morning, $465 billion (approximately £381 billion) has been wiped off global stock indices. That, though, is a pretty meaningless figure; it is percentages which matter. A more meaningful way of putting it is that the FTSE100 is about 6 per cent off the all-time peak it reached last month and has given up all its gains this year. The FTSE250 has lost a similar percentage of value in the past few days and remains 19 per cent down on the peak it reached in the summer of 2021.

The panic is entirely logical: just as in 2008/09, there is a realisation that few people really know what is under the bonnets of the world’s banks. If Silicon Valley Bank can get itself into trouble over positions in government bonds, it hardly beyond imagination to think that many other banks might be facing similar losses.

On the other hand, bank failures are a lot more common than you might think – if rarely on the scale of the Silicon Valley Bank, which by some measures is the second largest in history. The US alone has seen 564 bank failures since 2001, according to the Federal Deposit Insurance Corporation. While there was a rush of failures between 2008 and 2010, even in the good years there are a smattering of failures. The longest period this century without a US bank collapsing was 2021-2022.

As I have noted here before, in relation to UK business failures, emergency measures to prop up the economy in the face of the pandemic seem to have had the effect of staving off bankruptcy of companies which, in normal times, would have gone bust. The unwinding of government help and central bank stimulus can only be expected to provoke a rush of business failures as the economy works through a backlog of bankruptcies.

There will be understandable nervousness for the next few weeks, even if some of the banking shares which crashed on Monday have staged a recovery on Tuesday. Nevertheless, many investors will be asking whether the collapse of the Silicon Valley Bank has brought forward the expected peak in interest rates. It is not clear that it will, but further evidence this morning suggests that US inflation is on a long, steady downward trend: inflation fell from 6.4 per cent in February to 6.0 per cent.

There may be more panicky days to come, and stock markets may explore new lows over the coming days. But it is not impossible to construct an argument that the collapse of Silicon Valley Bank will represent peak pessimism – and that once again the month of March will turn out to be beginning of the turnaround for global markets.