Moreover, Wills said the feared contagion over SVB and Credit Suisse had not materialised.
He explained: "When we think about UK banks they are probably in a better place than US banks. In the US, cross-party policy change in the Trump administration loosened regulations on the smaller banks, such as SVB.
"So in terms of regulation, US banks are in a worse place than UK or European banks. Moreover, capital ratios are still high in the UK - although there there is some chatter around commercial real estate, and there are a lot of empty office blocks.
"However, I think UK and European banks are far better placed this time around with far less leverage and higher capital ratios."
Allocation strategy
"Cash is investible once again", Scott commented, with money market funds experiencing strong inflows over the first quarter to the end of March.
But while bond allocations had done well thanks to central banks raising rates, he warned there are "consequences" to interest rate rises, whether this is in regard to bank lending
Spencer said: "Across bond markets, there has been huge volatility so far this year, and we remain cautious in our positioning.
"Aggressive rate hikes will inevitably cause accidents and unintended consequences and it can take time for the effects of rate hikes to be fed into the wider economy.
"But our base case is that we are cautious, not bearish."
During Q1, he said the team had been reducing some equity positioning and taking some profits in the credit positions they had at the start of the year, to be able to back managers they have "historically invested with."
These include Man GLG Asia ex-Japan, for both Navigator and Lifestyle funds, and Premier Miton UK Value Opportunities, run by Matthew Tillett.
The team also introduced iShares Physical Gold for some of the more cautious portfolios. "Given the macro backdrop, we have bought some financial assets", Spencer added.
Calmer skies ahead
Lothar Mentel, chief investment officer for Tatton, agreed there were calmer skies ahead.
In his latest update, he said: "If markets have calmed down after March’s mini global banking crisis, it seems that the global political environment has also become more serene.
"The western world’s central banks are still telling us interest rates will remain high because of inflation, but Tesco cut the price of milk.
"Compared to last year, the western world’s retail prices are 5-7 per cent higher but, in Germany, prices between producers and wholesalers are now only about 2 per cent higher than last year.
"In Asia, prices are not rising discernibly. Indeed, China’s producer prices are 2.5 per cent below last year’s level."
