Credit Suisse to borrow €51bn from Swiss central bank
The US banking system remains healthy and Americans can rest assured that their deposits will be there when they are needed, Treasury Secretary Janet Yellen told the Senate Finance Committee today.
In comments prepared for the budget hearing, Yellen said the “strong and decisive” actions taken this week by the US government to bolster public confidence in the banking system in the wake of the collapse of Silicon Valley Bank underlined its resolve to protect depositors.
It comes after Credit Suisse shares jumped more than 30% in the opening of trading in Zurich on Thursday after asking the central bank to allay concerns about its finances.
It was announced last night that the lender will borrow up to CHF50bn (£44bn) from the Swiss National Bank to bolster its liquidity.
The troubled banking giant said it was taking drastic action to shore up its finances after its shares fell 30% on Wednesday.
Shares of the Swiss bank fell sharply after its main shareholder, the Saudi National Bank, said it would not provide any additional bailout. However, Swiss regulators have announced that the country’s central bank will provide Credit Suisse with liquidity if needed, helping to ease earlier concerns.
Asian stocks fall
Asian equities fell today and investors bought gold, bonds and the dollar as fears of a banking crisis reignited fresh trouble at Credit Suisse.
The Japanese Nikkei fell 2% in early trading. Australian stocks also fell 2% on losses in banking stocks, while mining stocks also fell heavily as the specter of global banking stress has traders dumping all types of growth-sensitive assets.
Hang Seng futures fell 2%.
Oil fell to a 15-month low. Gold touched a six-week high overnight. In New York, the S&P 500 fell 0.7%, but the focus was on banks and Europe, where Credit Suisse shares fell 30% to a record low after its largest shareholder, the National Bank of Saudi Arabia, said unable to provide additional financial assistance.
(Reuters)
Banking crisis fears intensify as stocks of top lenders plunge
Leading European bank stocks tumbled amid growing fears of global banking weakness, raising fears of another 2008-style financial crisis.
The sell-off in banking stocks worsened yesterday, leading to reports that some major stocks have been temporarily suspended.
Swiss bank Credit Suisse caused panic after one of its main investors, the National Bank of Saudi Arabia, said it could not increase its stake in the struggling lender.
This led to a sharp drop in the value of shares of other large banks: Barclays shares, listed in London, fell more than 8%, while European banks such as Societe Generale and BNP Paribas lost about 10%.
Read more here.
Banking crisis fears intensify as stocks of top lenders plunge
The sell-off in banking shares worsened on Wednesday, leading to reports that some major stocks have been temporarily suspended.
Yellen told senators that the US banking system “remains healthy”
The US banking system remains healthy and Americans can rest assured that their deposits will be there when they are needed, Treasury Secretary Janet Yellen told the Senate Finance Committee today.
In comments prepared for the budget hearing, Yellen said the “strong and decisive” actions taken this week by the US government to bolster public confidence in the banking system in the wake of the collapse of Silicon Valley Bank underlined its determination to protect depositors.
“I can assure committee members that our banking system remains healthy and that Americans can rest assured that their deposits will be there when they need them,” Yellen said in her speech.
“This week’s actions demonstrate our strong commitment to keeping savers’ savings safe.”
In prepared comments, she did not mention the situation around Credit Suisse, whose shares fell on Wednesday before regulators promised a liquidity lifeline for the flagship Swiss lender.
The Federal Reserve Faces Tough Decisions
The Federal Reserve is facing harsh criticism for missing what observers said were clear signs that a Silicon Valley bank was at high risk of collapse in the second-biggest bank failure in US history.
The Fed was the main federal oversight agency for the Santa Clara, California-based bank that went bankrupt last week. The bank was also controlled by the California Department of Financial Protection and Innovation.
Critics point to the many red flags surrounding the Silicon Valley Bank, including its rapid post-pandemic growth, unusually high levels of uninsured deposits, and its many investments in long-term government bonds and mortgage-backed securities that have fallen in value as interest rates have risen. . .
Fed, criticized for bank failure, faces tough decisions
The Federal Reserve is facing harsh criticism for missing what observers said were clear signs that a Silicon Valley bank was at high risk of failure, the second-biggest bank failure in U.S. history.
Nasdaq futures are rising
Nasdaq futures rose on Thursday as the Swiss central bank’s lifeline for Credit Suisse calmed global markets.
U.S.-listed shares of Credit Suisse rose 3% in premarket trading after the bank secured up to $54 billion in credit facilities from the Swiss National Bank to bolster liquidity and investor confidence, which plummeted after the lender’s stock plunged on Wednesday. .
Wall Street’s major indexes were under heavy selling pressure in the previous session after troubles at Credit Suisse rekindled fears of a banking crisis, which eased after the US government’s emergency response following the collapse of SVB Financial and Signature Bank.
“We believe concerns about bank solvency are overblown and most banks remain in a strong liquidity position,” UBS Global Wealth Management chief investment officer Mark Hefele said in a note.
“But tight funding conditions can still pose challenges for a small number of individual banks, and sector profitability faces broader headwinds.”
Sunak has a lot to do to stop the flow of London shares to New York.
As two big firms leave the city, it’s important that the government show a better understanding of big business. Chris Blackhurst.
Sunak has a lot to do to stop the flow of London shares to New York.
As two big firms leave the city, it’s important that the government show a better understanding of big business, according to Chris Blackhurst.
The reports indicate the application deadline for SVB and Signature Bank.
Banks interested in acquiring Silicon Valley Bank and Signature Bank must submit bids by March 17, people familiar with the matter said. Reuters.
This is the second attempt by the US Federal Deposit Insurance Corporation (FDIC) to sell SVB after a failed attempt on Sunday.
Reuters adds:
The FDIC is seeking to sell SVB and Signature as a whole, while parts of the banks could be considered if the sale of the entire company does not go ahead, two sources said.
Only bidders with a valid bank charter will be allowed to examine the financial performance of banks before submitting their proposal, two sources said, which is intended to give traditional lenders an edge over private equity firms.
The two sources added that any purchaser of Signature must agree to forego all crypto business at the bank.
Jeremy Hunt Encouraged by Credit Suisse Liquidity Efforts
Chancellor Jeremy Hunt said he welcomed efforts to boost Credit Suisse’s liquidity as the fall in its share price raised new concerns about the health of financial institutions.
This was announced by the British Chancellor. Times Radio: “All I will say is that I certainly follow what is happening in the markets, the governor of the Bank of England carefully monitors what is happening; he keeps me informed. I think the news we heard from the Swiss authorities overnight is welcome.”
Earlier, Mr Hunt told Sky News he was “watching developments very closely” and said the news from the Swiss authorities was “reassuring”.
Lawmaker goes viral with video explaining Silicon Valley Bank collapse
The congressman received widespread praise for posting a two-and-a-half-minute video on Twitter and TikTok clearly outlining the Silicon Valley bank situation.
Chapel Hill-born North Carolina Democrat Jeff Jackson was elected to the U.S. House of Representatives from the state’s 14th district in 2022.
At 2am on Monday, he made a social media video explaining how the Silicon Valley bank crisis started, what is being done about it, and to prevent…
Credit: www.independent.co.uk /