SVB collapse — latest news: Silicon Valley Bank ‘open for business’ says new CEO as Moody’s US bank view dims

Wall Street rebounded on Tuesday as inflation data met expectations and regional bank shares bounced back after Monday’s sharp falls following the collapse of Silicon Valley Bank (SVB).

Six regional financial institutions remain under tight scrutiny but the response from regulators to protect depositors appears to have addressed market concerns.

Nevertheless, credit ratings firm Moody’s has cut its outlook for the whole of the US banking system to negative from stable “to reflect the rapid deterioration in the operating environment”.

Meanwhile, the US Securities and Exchange Commission and Department of Justice have reportedly opened probes into the failure of SVB and any share trades undertaken by management in the run-up to its shuttering on Friday. A class-action lawsuit has also been filed by investors against the parent company, CEO and CFO.

Tim Mayopoulos, the newly appointed CEO of SVB, has declared the bank is back open for business, opening new accounts and making new loans. He served as CEO of Fannie Mae bringing it back to profitability after the 2008 financial crisis.

Elsewhere, Wall Street expert Robert Kiyosaki, famed for predicting the Lehman Brothers’ failure, has pegged Credit Suisse as the next major bank most likely to collapse.

Key Points

• Dow Jones closes up 330 points as bank shares bounce back

• DOJ and SEC to probe stock sales ahead of Silicon Valley Bank collapse, report says

• ‘Rapid deterioration’ of operating environment sees Moody’s cut US banking outlook

• Credit Suisse shares fall after Kiyosaki prediction

• New York State Department of Financial Services takes over Signature Bank

• Biden to ask Congress ‘to strengthen the rules for banks'

Top GOP Senate Finance member: No new banking rules needed

21:25 , Oliver O'Connell

Senator Mike Crapo, the top Republican on the Senate Finance Committee told CNN’s Manu Raju that no new banking rules were needed following the collapse of Silicon Valley Bank, arguing the system is in place, but better supervision is needed.

Mr Crapo was the author of the 2018 bill that led to the rollback of the Dodd-Frank regulations put in place after the 2008 global financial crisis.

“The regulatory system is in place. The regulatory authorities that Congress has given to the Fed and the FDIC are completely adequate for the system to work,” he said.

“We simply need to have better supervision, and probably, like I said, a little tuning up of how the regulatory stress testing works with regard to liquidity issues in the banks right now.”

Watering down financial regulations sees Trump blamed for Silicon Valley Bank collapse

21:15 , Oliver O'Connell

Critics looking to assign blame for the collapse of Silicon Valley Bank have found possible culprits in Donald Trump and Republican senators.

Though little known outside of Silicon Valley, the SVB was the leading lender to tech firms and startups before it crumbled on Friday.

Graig Graziosi reports.

Trump blamed over Silicon Valley Bank collapse for cutting down financial regulations

Watch: UK arm of Silicon Valley Bank sold to HSBC for £1

20:45 , Oliver O'Connell

UK arm of Silicon Valley Bank sold to HSBC for £1

Tough decisions ahead as Fed criticised for missing red flags before bank failure

20:32 , Oliver O'Connell

The Federal Reserve is facing stinging criticism for missing what observers say were clear signs that Silicon Valley Bank was at high risk of collapsing into the second-largest bank failure in U.S. history.

The Fed was the primary federal supervisor of the bank based in Santa Clara, California, that failed last week. The bank was also overseen by the California Department of Financial Protection and Innovation.

Critics point to many red flags surrounding Silicon Valley Bank, including its rapid growth since the pandemic, its unusually high level of uninsured deposits and its many investments in long-term government bonds and mortgage-backed securities, which tumbled in value as interest rates rose.

Read more:

Fed, under criticism for bank failure, faces tough decisions

Dow Jones closes up 330 points as bank shares bounce back

20:12 , Oliver O'Connell

The Dow Jones Industrial Average closed up 330 points on Tuesday as investors signaled that they believe the risk of contagion to the wider banking network has been contained by regulators following the failure of Silicon Valley Bank and Signature Bank over the weekend.

The Dow Jones Industrial Average ended up 329.28 points, or 1%, at 32,153.89, ending a five-day losing streak. The S&P 500 added 64.54 points, or 1.67%, to close at 3,920.30. The Nasdaq Composite climbed 239.31 points, or 2.1%, to end at 11,428.15.

In addition to an improved perception of the banking system, the Labor Department's CPI report showed consumer prices cooled in February, largely in line with market expectations, with headline and core measures notching welcome annual declines.

Even so, inflation has a considerable way to go before approaching the central bank's average annual 2% target.

But signs of economic softness, combined with the regional banking scare, have increased the odds that the Federal Reserve will implement a modest, 25 basis-point hike to its key interest rate at the conclusion of its two-day policy meeting on 22 March.

With reporting from Reuters

Private equity firms interested in SVB loan book, reports say

20:00 , Oliver O'Connell

CNBC reports that private equity firms Apollo Global Management and KKR are among the institutions reviewing a book of loans held by Silicon Valley Bank. The network cites people familiar with the discussions who requested anonymity.

Two of the sources said Apollo may be interested in acquiring a piece of the business but it is unclear if the FDIC would prefer a single buyer for the whole bank.

Bloomberg earlier reported a number of private equity firms were interested in the bank’s loan portfolio, including Ares Management, Blackstone, and Carlyle Group, in addition to Apollo and KKR.

New Silicon Valley Bank CEO brings experience and ‘humility'

19:40 , Oliver O'Connell

In a message to clients, newly appointed Silicon Valley Bank CEO Tim Mayopoulos says: “I look forward to getting to know the clients of Silicon Valley Bank. I come to this role with humility. I also come to this role with experience in these kinds of situations.”

He explains: “I was part of the new leadership team that joined Fannie Mae in the wake of the financial crisis in 2008-09, and I served as the CEO of Fannie Mae from 2012-18. I am very proud of work we did there to restore the company to profitability and to stabilize the housing finance system in a period of unprecedented challenge.”

Mr Mayopoulos adds: “I also come with experience in and an appreciation for the innovation economy. Until recently, I was the president of a Silicon Valley-based software company that provides technology to financial institutions to serve their consumer banking customers. I know how important Silicon Valley Bank has been and continues to be to the success of its clients and the innovation ecosystem.”

Premium: Has enough been done to calm Wall Street over the banking crisis?

19:20 , Oliver O'Connell

James Moore, The Independent’s chief business commentator, writes:

Just what we needed right now: another banking crisis. But after the bloodbath at the beginning of the week, a rally quickly got underway. Regional banks in the United States – in real danger of experiencing a run on their deposits while larger rivals benefit from inflows – found some support.

Has enough been done to calm Wall Street over the banking crisis?

New Silicon Valley Bank CEO: ‘We are open for business'

19:05 , Oliver O'Connell

Tim Mayopoulos, the new CEO of Silicon Valley Bank — now technically known as Silicon Valley Bridge Bank — has declared the bank is open for business.

In a message posted to the company’s website and emailed to customers, Mr Mayopoulos said: “We are doing everything we can to rebuild, win back your confidence, and continue supporting the innovation economy. We recognise the past few days have been an extremely challenging time, and we are grateful for your patience.”

He continued: “We are open for business and are hard at work bringing all systems and solutions back online to support you. We are making new loans and fully honoring existing credit facilities.

“The number one thing you can do to support the future of this institution is to help us rebuild our deposit base, both by leaving deposits with Silicon Valley Bridge Bank and transferring back deposits that left over the last several days.”

Underlining the announcement yesterday that depositors have full access to their money, and that both new and existing deposits are fully protected by the FDIC, he characterised the bank as now among the safest in the country thanks to the actions of regulators.

The bank is actively opening new accounts of all sizes and making new loans, Mr Mayopoulos added.

The first ‘Twitter fueled bank run’

18:52 , Oliver O'Connell

House Financial Services Committee Chairman Patrick McHenry (R-NC) labelled the Silicon Valley Bank collapse the “first Twitter-fueled bank run” on Friday.

In a statement, he said: “This was the first Twitter-fueled bank run. At this time, it is important to remain levelheaded and look at the facts — not speculation — when assessing the right path forward, I have confidence in our financial regulators and the protections already in place to ensure the safety and soundness of our financial system.”

This morning he joined CNBC’s Squawkbox to underline his statement saying: “I want to convey confidence to the American people that these agencies are doing the right thing.”

You can watch the whole interview segment here:

Demise of Silicon Valley Bank disrupts the tech disruptors

18:32 , Oliver O'Connell

Silicon Valley Bank’s collapse rattled the technology industry that had been the bank’s backbone, leaving shell-shocked entrepreneurs thankful for the government reprieve that saved their money while they mourned the loss of a place that served as a chummy club of innovation.

Read more:

Silicon Valley Bank's demise disrupts the disruptors in tech

Lawmaker’s explanation of Silicon Valley Bank’s collapse goes viral

18:12 , Oliver O'Connell

A congressman has been widely praised for posting a two-and-a-half-minute video to Twitter and TikTok clearly laying out the Silicon Valley Bank situation.

North Carolina Democrat Jeff Jackson, originally from Chapel Hill, was elected to the US House of Representatives for the state’s 14th District in 2022.

At 2am on Monday morning, he filmed a video for social media explaining how the Silicon Valley Bank crisis began, what was being done about it, and to discourage panic.

Read more:

North Carolina lawmaker’s video explanation of the SVB collapse earns praise online

Six regional US banks under scrutiny

17:52 , Oliver O'Connell

Moody’s Investors Service placed six other US banks on review for potential downgrades late on Monday, following the collapse of Silicon Valley Bank. The credit ratings firm also downgraded Signature Bank deep into junk territory.

On the firm’s watchlist are First Republic Bank, Zions, Western Alliance, Comerica, UMB Financial, and Intrust Financial. Moody’s cited the “extremely volatile funding conditions for some US banks exposed to the risk of uninsured deposit outflows.”

Shares of regional banks plummeted on Monday despite the federal government stepping in to prevent further bank runs.

When markets opened on Tuesday, regional bank shares rebounded strongly.

Watch: UrbanStems CEO talks about having 100% of cash with SVB

17:32 , Oliver O'Connell

BUT New York regulator says Signature Bank closure ‘nothing to do with crypto’

17:22 , Oliver O'Connell

New York’s financial regulator has pushed back on former Rep Barney Frank’s comments, saying its decision to close Signature Bank had “nothing to do with crypto,” citing what it called “a significant crisis of confidence in the bank’s leadership” that occurred over the weekend after regulators shuttered Silicon Valley Bank.

Mr Frank is a board member of Signature Bank and was one of the pioneers of the landmark Dodd-Frank Act, which was enacted after the 2008 financial crisis to better insulate the banking system from shocks.

“I think part of what happened was that regulators wanted to send a very strong anti-crypto message,” Mr Frank told CNBC on Monday. “We became the poster boy because there was no insolvency based on the fundamentals.”

But NYDFS denied his claims in a statement on Tuesday, saying that its decision to close Signature Bank on Sunday and appoint the Federal Deposit Insurance Corp as receiver “was based on the current status of the bank and its ability to do business in a safe and sound manner on Monday.”

“The decisions made over the weekend had nothing to do with crypto. Signature was a traditional commercial bank with a wide range of activities and customers,” an NYDFS spokesperson said.

“DFS has been facilitating well-regulated crypto activities for several years, and is a national model for regulating the space,” they said.

The spokesperson added that as withdrawal requests ballooned over the weekend, Signature Bank failed to provide reliable and consistent data.

Mr Frank said he was surprised the regulator said the decision to close the bank was not related to cryptocurrency.

“I think that was a factor,” he said in an interview. “I’m puzzled as to why it was closed.”

He added that to his knowledge, bank executives were working to provide data to regulators.

“What we heard from our executives is that the deposit situation had stabilised and they would be getting the capital from the discount window and I continue to be convinced that if we had opened on Monday given the announcements of those two policies, we would have been in a reasonably good shape and certainly functional,” he said.

Signature was a commercial bank with private client offices with nine national business lines including commercial real estate and digital asset banking.

With reporting from Reuters

ICYMI: Barney Frank claims Signature Bank seized as warning to stay away from crypto

17:12 , Oliver O'Connell

A regulatory takeover of a New York-based bank was intended to send a message to U.S. banks to stay away from the cryptocurrency business, a former member of Congress who was on the bank’s board says.

Former U.S. Rep. Barney Frank said Monday that he believes the state officials behind the action were trying to make an example of Signature Bank.

“This was just a way to tell people, ‘We don’t want you dealing with crypto,’” Frank told The Associated Press in a telephone interview.

Signature Bank seized to send banks a message, director says

Watch: No losses will be borne by taxpayers, Biden says

17:00 , Oliver O'Connell

‘No losses’ will be borne by taxpayers after Silicon Valley Bank collapse, Biden says

‘Rapid deterioration’ of operating environment sees Moody’s cut US banking outlook

16:56 , Oliver O'Connell

Credit ratings agency Moody’s cut its outlook for the whole of the US banking system to negative from stable “to reflect the rapid deterioration in the operating environment”.

The move follows the failure of Silicon Valley Bank and Signature Bank in quick succession over the weekend.

The Tuesday morning report came as US regional banks — that saw dramatic plunges in value on Monday — bounced back from steep selloff after fears of a contagion effect eased following the intervention of the federal government and regulators to protect depositors.

Nevertheless, the Moody's report cited “the rapid and substantial decline in bank depositor and investor confidence” in recent days, which it claimed highlights “risks in US banks' asset-liability management”.

There have been no further bank runs since SVB failed, though there were concerns for other similar-sized institutions that often have a less diverse, more focused client base, either geographically or by sector, when compared to larger banks such as Citi, Bank of America, Wells Fargo, or JP Morgan Chase.

On Moody’s watchlist are First Republic Bank, Zions, Western Alliance, Comerica, UMB Financial, and Intrust Financial.

The firm cited the “extremely volatile funding conditions for some US banks exposed to the risk of uninsured deposit outflows”.

Class action suit filed against Silicon Valley Bank parent and chiefs

16:32 , Oliver O'Connell

A class action lawsuit is being filed against the parent company of Silicon Valley Bank, its CEO and its chief financial officer, saying that company didn’t disclose the risks that future interest rate increases would have on its business.

Read on:

Class action suit filed against Silicon Valley Bank parent

Warren: Powell should recuse himself from SVB probe

16:12 , Oliver O'Connell

Democratic Senator Elizabeth Warren on Tuesday called on Federal Reserve Chair Jerome Powell to recuse himself from an internal review of recent bank failures, saying his actions “directly contributed” to them.

In a separate letter, Senator Warren pressed ex-Silicon Valley Bank CEO Greg Becker for details on the bank’s lobbying in favor of a 2018 law that eased regulations for large regional banks, which she and others have pointed to as contributing to the bank’s Friday collapse. She also asked for information regarding any stock sales by executives or bonuses paid out in the months leading up to its failure.

The Federal Reserve said on Monday it is reviewing its oversight of the bank in the wake of its abrupt failure Friday. Senator Warren argued that Mr Powell’s prior support for easing bank rules indicates he should not participate in the review. Fed Vice Chairman Michael Barr, who President Joe Biden nominated, is leading that review.

“Fed Chair Powell’s actions directly contributed to these bank failures. For the Fed’s inquiry to have credibility, Powell must recuse himself from this internal review,” she said in a Twitter post.

“It’s appropriate for Vice Chair for Supervision Barr to have the independence necessary to do his job,” said Ms Warren, a Democrat, who has been a sharp critic of Mr Powell.

Reuters

Banks shake off immediate SVB contagion fears

15:50 , Oliver O'Connell

US bank stocks made sharp gains on Tuesday, recovering ground from lows triggered by the collapses of Silicon Valley Bank and Signature Bank which had prompted assurances from President Joe Biden and other global policymakers.

Worries about contagion risks from the collapse of the two US banks had compounded investor concerns about the impact on lenders of rising interest rates, hitting bank shares in Asia and Europe as investors re-examined their risks.

An indicator of credit risk in the eurozone banking system hit its highest since mid-July, while ratings agency Moody’s cut its US banking system outlook to negative from stable “to reflect the rapid deterioration in the operating environment”.

Although the VIX volatility index, Wall Street’s “fear gauge”, neared six-month highs overnight, US regional bank shares bounced, with First Republic Bank up 52.7 per cent, a day after hitting an intraday record low of $17.53.

“If we do not see any high-profile failures in the near future, then the fears would subside,” said Jack Ablin, chief investment officer at Cresset Capital.

Banking giants Citi, Wells Fargo, and JP Morgan were also higher in the pre-market.

However, Moody’s said it was reviewing six lenders for a downgrade, including First Republic, Zions Bancorp, Western Alliance Bancorp and Comerica.

Reuters

Watch: Democrat congressman gives clearest explanation of SVB bank run

15:35 , Oliver O'Connell

North Carolina Democrat Congressman Jeff Jackson has been widely praised for posting this two and half minute video to Twitter and TikTok clearly laying out the Silicon Valley Bank situation.

Watch below:

Ah, yes, being ‘woke’ brought down Silicon Valley Bank... of course!

15:25 , Oliver O'Connell

The historic failure of Silicon Valley Bank is likely the result of a host of compounded factors that have nothing to do with so-called “wokeness,” from Donald Trump-era cuts to regulations that were put in place during the last financial crisis to the bank’s untenable concentration in an explosion of venture capital firms and tech startups as it careened into reality, rising interest rates and panic.

Alex Woodward reports.

Republicans blame ‘wokeness’ for Silicon Valley Bank’s collapse

After fierce blowback against Trump administration, Pence blames Biden for SVB failure

15:05 , Oliver O'Connell

Former Vice President Mike Pence has joined the choir of conservative voices trying to pin the Silicon Valley Bank collapse on Democrats while Democrats try to do the same to them.

In an editorial for The Daily Mail, Mr Pence takes aim at Joe Biden and the Democrats, claiming that “just like 2008,” the party has “increased spending by over $10 trillion” that “fueled record inflation, inevitably requiring the FED to raise interest rates.”

He laid some of the blame on the bank, which collapsed on Friday, and laced his criticisms with conservative media buzzwords.

Graig Graziosi reports on the former vice president’s commentary.

Pence: Biden to blame for SVB collapse

DOJ and SEC to probe stock sales ahead of Silicon Valley Bank collapse, report says

14:50 , Oliver O'Connell

The US Department of Justice and the Securities and Exchange Commission are investigating the collapse of Silicon Valley Bank, The Wall Street Journal reports, citing people familiar with the matter.

Read more:

SVB: Justice Department and SEC to probe stock sales ahead of collapse

Market rally continues

14:47 , Oliver O'Connell

The market rally continues in New York with the Dow Jones Industrial average up 419 points (1.32 per cent) as of 10.45am ET.

The S&P 500 is up 1.9 per cent and the Nasdaq Composite has climbed 2.2 per cent.

After yesterday’s brutal pummeling of the share price of a number of regional banks, many have shown signs of recovery today with no signs of further bank runs since the federal government said it would effectively guarantee customer deposits.

White House statement on February inflation figures

14:30 , Oliver O'Connell

Statement from President Joe Biden on February CPI Report

Today’s report shows annual inflation is down by a third from this summer at a time when the unemployment rate remains near a 50-year low. That is the slowest annual increase since September 2021. I will continue working to lower costs for hard-working Americans so they have a little more breathing room at the end of the month.

On that front, I am pleased at today’s announcement that, in line with my call, Novo Nordisk will be lowering their insulin prices by 75 percent, following Eli Lilley’s action. This builds on the important progress we made last year when I signed a law to cap insulin at $35 for seniors. I urge all other manufacturers to follow suit and Republicans in Congress to join us and cap insulin at $35 for all Americans.

As I’ve long said, and as challenges in the banking sector remind us, there will be setbacks along the way in our transition to steady and stable growth. But we face these challenges from a position of strength. More than 12 million jobs have been created since I took office and the share of working age adults in jobs or looking for work is the highest it has been in 15 years. We will continue to make progress in our fight to build an economy from the bottom up and middle out, not top down.

At the same time, I will do everything in my power to prevent us from going backwards on the progress we’ve made – including by standing up to Congressional Republicans who threaten economic catastrophe over the debt limit in order to secure tax cuts for the wealthy and large corporations and reckless cuts to critical programs that American seniors and families count on.

More problems for tech as Meta slashes another 10,000 jobs

14:15 , Oliver O'Connell

Facebook parent Meta is slashing another 10,000 jobs and will not fill 5,000 open positions as the social media pioneer cuts costs.

The company said on Tuesday it will reduce the size of its recruiting team and make further cuts in its tech groups in late April, and then its business groups in late May.

“This will be tough and there’s no way around that,” said CEO Mark Zuckerberg. “It will mean saying goodbye to talented and passionate colleagues who have been part of our success.”

Andrew Griffin has the full details.

Meta to fire 10,000 more people, Mark Zuckerberg says

Full Story: Wall Street expert predicts next major bank to fold

14:00 , Oliver O'Connell

A Wall Street expert has revealed which bank he believes will fail next, following the Silicon Valley Bank (SVB) collapse.

SVB folded on Friday after failing to raise new capital after it sold government bonds at heavy losses to reimburse customers withdrawing their cash.

Now Robert Kiyosaki, who accurately predicted the 2008 Lehman Brothers’ collapse, warned that Credit Suisse could be at risk as the volatile bond market crashes, with rising interest causing bonds to fall in price.

Kate Plummer reports.

Wall Street expert predicts next major bank to fold

Regulator response should address market concerns for now

13:45 , Oliver O'Connell

Several experts said the tools already announced, including a deposit guarantee at the two failed banks and a new Federal Reserve facility that can provide banks with liquidity on attractive terms, should address market concerns for now.

Silicon Valley Bank failed days after announcing it had to raise capital to offset losses brought on by rapid interest rate increases, and its extremely high level of uninsured deposits were quick to flee.

The experts said the measures announced Sunday are squarely aimed at both issues, giving banks easy access to emergency funds and sending a message that bank deposits, even uninsured ones, are safe.

Some dramatic steps, such as raising the $250,000 ceiling for FDIC deposit insurance, would require new laws from Congress, an uncertain prospect in a divided government where policymakers are already feuding over next steps.

“The Fed and Treasury have kind of shot their bazooka for now,” said Mark Sobel, a former senior US Treasury official who is US chairman of the London-based OMFIF financial think tank. “I think it’s a question of the market steadying out.”

Reuters

US regional bank shares rebound after sell-off

13:38 , Oliver O'Connell

Shares in US regional banks are rebounding after Monday’s sell-off, with First Republic up sharply in early Tuesday trading indicating concerns over the bank’s future may be easing.

The stock traded 52 per cent higher in premarket trading. Shares of other regional banks also surged before the opening bell, with PacWest jumping 44 per cent, KeyCorp up 16 per cent, and Zions Bancorp up 21 per cent.

After the opening bell in New York, the Dow Jones Industrial Average jumped more than 250 points and by 9.40am was up 328 points of more than 1.03 per cent.

US market holds steady as inflation eases slightly

13:32 , Oliver O'Connell

US futures held steady following a report that inflation eased slightly last month but remains elevated, posing a challenge for the Federal Reserve at a delicate moment for the financial system.

Even though prices are rising faster than the Fed wants, some economists expect the central bank to suspend its yearlong streak of interest rate hikes when it meets next week. With the collapse of two large banks since Friday fueling anxiety about other regional banks, the Fed may, at least in the short term, focus more on boosting confidence in the financial system than on its long-term drive to tame inflation.

Futures for the Dow were up 0.8% before the bell Tuesday, while futures for the S&P rose 1%.

The government said Tuesday that prices increased 0.4% last month, less than January’s 0.5% rise. But excluding volatile food and energy costs, core prices rose 0.5% last month, slightly higher than January’s 0.4% gain. The Fed is particularly focused on the core measure as a gauge of underlying inflation pressures.

AP

Six regional US banks under scrutiny

13:29 , Oliver O'Connell

Moody’s Investors Service placed six other US banks on review for potential downgrades late on Monday, following the collapse of Silicon Valley Bank. The credit ratings firm also downgraded Signature Bank deep into junk territory.

On the firm’s watchlist are First Republic Bank, Zions, Western Alliance, Comerica, UMB Financial, and Intrust Financial. Moody’s cited the “extremely volatile funding conditions for some US banks exposed to the risk of uninsured deposit outflows.”

Shares of regional banks plummeted on Monday despite the federal government stepping in to prevent further bank runs.

As markets open on Tuesday, regional bank shares are rebounding strongly.

Watch: UrbanStems CEO talks about having 100% of cash with SVB

13:23 , Oliver O'Connell

US regulators may take wait-and-see approach before further intervention

13:15 , Oliver O'Connell

US regulators are likely to let emergency measures announced Sunday to shore up investor confidence in the banking sector sink in and increase scrutiny of the industry before intervening with any further steps, regulatory experts said.

Fears remained on Wall Street on Monday despite the measures announced over the weekend following the collapse of California-based Silicon Valley Bank and New York-based Signature Bank. Regional bank shares tumbled, and the S&P 500 Banking Index ended the day down 7%, its largest one-day fall since 11 June 2020.

Some investors have called for further action by banking regulators to reassure markets. But banking experts said regulators would likely want to see the extent of any further contagion before deciding on fresh measures.

“It all depends on what the situation will look like,” said Saule Omarova, a law professor at Cornell Law School who President Joe Biden once nominated to lead the Office of the Comptroller of the Currency, a top banking regulator. “Whatever else they can do will depend on how creative they are.”

Some experts also argued there were some signs for optimism that the intervention was helping.

“It’s noteworthy that we haven’t seen any bank failures yet throughout the day,” said Young Kim, a banking lawyer with Clifford Chance. “At least some of their objectives were achieved as it concerns calming fears.”

Reuters

Wall Street Journal under fire for column blaming SVB collapse on diversity

13:15 , Megan Sheets

The Wall Street Journal is facing fierce backlash for publishing a column that appeared to blame the Silicon Valley Bank collapse on diversity efforts.

Opinion writer Andy Kessler, whose column focuses on technology and markets, reacted to the stunning bank failure in a piece entitled “Who Killed Silicon Valley Bank?”

“In its proxy statement, [Silicon Valley Bank] notes that besides 91 percent of their board being independent and 45 percent women, they also have ‘1 Black,’ ‘1 LGBTQ+,’ and ‘2 Veterans,’” he wrote.

“I’m not saying 12 white men would have avoided this mess, but the company may have been distracted by diversity demands.”

The comments drew immense criticism on social media.

Credit Suisse shares fall after Kiyosaki prediction

12:46 , Megan Sheets

Shares in Credit Suisse shares fell by 5 per cent to an all-time low in early trading on Tuesday as Wall Street continues to reel from the Silicon Valley Bank (SVB) collapse.

The share drop came just after Credit Suisse - the world’s eighth largest investment bank - published an annual report revealing an $8bn loss for 2022.

The bank blamed “weaknesses” in the report on “failure to design and maintain an effective risk assessment process to identify and analyze the risk of material misstatements”.

The report was especially alarming given a prediction the night before from Robert Kiyosaki, an expert who foresaw the collapse of Lehman Brothers in 2008.

Speaking to Fox Business, Mr Kiyosaki said Credit Suisse was “most vulnerable” to following SVB into failure due to a struggling bond market.

“My prediction, I called Lehman Brothers years ago, and I think the next bank to go is Credit Suisse because the bond market is crashing,” he said.

“The bond market is much bigger than the stock market. The Fed is up and they’re the firemen and the arson.”

Republicans have a scapegoat for Silicon Valley Bank’s collapse: ‘Woke banks’

12:15 , Alex Woodward

For months, right-wing media figures and Republican elected officials have blamed a “woke” agenda for what they perceive is the collapse of American institutions, from its schools and workplaces to the banks that facilitate their businesses.

The historic failure of Silicon Valley Bank is likely the result of a host of compounded factors that have nothing to do with so-called “wokeness,” from Donald Trump-era cuts to regulations that were put in place during the last financial crisis to the bank’s untenable concentration in an explosion of venture capital firms and tech startups as it careened into reality, rising interest rates and panic.

Yet Republican lawmakers have continued to return to their catch-all scapegoat – using “woke” as an umbrella term for anything related to diversity, progressive political platforms, LGBT+ inclusivity, antiracism initiatives or environmental activism – while advancing a nationwide legislative agenda singularly devoted to its destruction.

The Independent’s Alex Woodward has more:

Republican blame ‘wokeness’ for Silicon Valley Bank’s collapse

Voices: The ghosts of the 2008 financial crisis loom over Biden’s response to Silicon Valley Bank

11:45 , Megan Sheets

Eric Garcia writes:

When President Joe Biden announced on Monday that people who had deposited their money in the now-unraveled Silicon Valley Bank would have their money available, he emphasised that American taxpayers would not be left on the hook.

Similarly, he added that the people responsible at the bank would need to be fired and that investors in Silicon Valley Bank would not be made whole, arguing that they took a risk and now have to suffer the losses.

On the surface, the Silicon Valley Bank collapse, as well as the closing of Signature Bank in New York, appears quite similar to the 2008 financial crisis that took banks like AIG to the brink and led to the collapse of Lehman Brothers. At the time, Mr Biden was a sitting senator running for vice president alongside Barack Obama. Both of them, as well as their White House opponent at the time, voted for the Troubled Assets Relief Program, or TARP, which became known as the “bailout” in the popular imagination.

But there are important distinctions between 2008 and today.

Read on:

Ghosts of the 2008 financial crisis loom over Biden’s response to Silicon Valley Bank

ICYMI: Biden speaks on US financial system

11:15 , Emily Atkinson

Watch: Biden speaks on US financial system following collapse of Silicon Valley Bank

Wall Street expert ‘predicts’ next bank failure after Silicon Valley

10:46 , Emily Atkinson

A Wall Street expert famed for predicting the 2008 Lehman Brothers’ failure has pegged Credit Suisse as the next major bank set for collapse.

Robert Kiyosaki divined his latest forecast just hours before the Switzerland-based bank confessed to having a “material weakness” in its internal controls over financial reporting and said it had not yet stemmed customer outflows.

Speaking on Cavuto: Coast to Coast, Mr Kiyosaki said: “The problem is the bond market, and my prediction, I called Lehman Brothers years ago, and I think the next bank to go is Credit Suisse, because the bond market is crashing.”

He explained, while holding up a bank note: “The US dollar is losing its hegemony in the world right now. So they’re going to print more and more and more of this...trying to keep this thing from sinking.”

Voices: The ghosts of the 2008 financial crisis loom over Biden’s response to Silicon Valley Bank

10:30 , Emily Atkinson

Eric Garcia writes:

When President Joe Biden announced on Monday that people who had deposited their money in the now-unraveled Silicon Valley Bank would have their money available, he emphasised that American taxpayers would not be left on the hook.

Similarly, he added that the people responsible at the bank would need to be fired and that investors in Silicon Valley Bank would not be made whole, arguing that they took a risk and now have to suffer the losses.

On the surface, the Silicon Valley Bank collapse, as well as the closing of Signature Bank in New York, appears quite similar to the 2008 financial crisis that took banks like AIG to the brink and led to the collapse of Lehman Brothers. At the time, Mr Biden was a sitting senator running for vice president alongside Barack Obama. Both of them, as well as their White House opponent at the time, voted for the Troubled Assets Relief Program, or TARP, which became known as the “bailout” in the popular imagination.

But there are important distinctions between 2008 and today.

Read on:

Ghosts of the 2008 financial crisis loom over Biden’s response to Silicon Valley Bank

Watch: Hunt hails ‘resilience’ as HSBC rescues Silicon Valley Bank’s UK branch

09:45 , Emily Atkinson

Jeremy Hunt hails ‘great resilience’ as HSBC rescues Silicon Valley Bank UK branch

Trump blamed for bank collapse over watering down regulations

09:00 , Oliver O'Connell

Critics looking to assign blame for the collapse of Silicon Valley Bank have found possible culprits in Donald Trump and Republican senators.

Graig Graziosi filed this report.

Trump blamed over Silicon Valley Bank collapse for cutting down financial regulations

Global bank shares slump after Silicon Valley Bank goes bust

08:15 , Emily Atkinson

Global bank shares have slumped following the collapse of Silicon Valley Bank.

On Tuesday, Japan’s Topix Banks saw its shares fall by more than 7 per cent, while Mitsubishi UFJ Financial Group’s index was down by 8.1 per cent in mid-day Asian trading.

In the UK, banks were heavily lower after steep falls on Friday, with international bank Standard Chartered sinking to the bottom of the FTSE 100 with a 6.9 per cent drop, and Barclays down by 6.3 per cent.

Other UK banks were also caught up in the rout, with Lloyds Banking Group closing 5.1 per cent lower, while NatWest was down 4.8 per cent and HSBC down 4.1 per cent.

Top European markets finished the day even more scathed than in Britain, with the German Dax tumbling more than 3 per cent and the French Cac 40 declining 2.9 per cent at close.

Why did Silicon Valley Bank collapse?

07:30 , Oliver O'Connell

The collapse of the 16th largest bank in the US sent ripples through global markets on Monday as governments and businesses scrambled to figure out what the impact would be and how it could be contained.

Silicon Valley Bank collapsed on Friday after failing to raise new capital last week.

On Monday, the UK government said that HSBC would take over the UK wing of the bank.

But what was SVB, why did it collapse, and are other banks at risk? We examine these questions here.

Read on:

Why did Silicon Valley Bank collapse and are other lenders at risk?

Central banks could ‘ease up on rate hikes’

05:45 , Oliver O'Connell

The collapse of Silicon Valley Bank could fuel pressure on central banks to ease up on interest-rate hikes, according to some finance experts.

Alice Haine, a personal finance analyst at Bestinvest, said: “The collapse of two US banks in recent days, Silicon Valley Bank and Signature Bank, is a reminder of the risks that come when central banks, like the US Federal Reserve, raise interest rates aggressively.”

Read on:

Central banks could ‘ease up on rate hikes’ after Silicon Valley Bank collapse

Biden says banking system is ‘safe’ and vows accountability for Silicon Valley Bank executives

03:45 , Oliver O'Connell

President Joe Biden reassured Americans that the nation’s banking system is safe after Silicon Valley Bank collapsed last week and said there would be accountability for financial executives.

The president’s actions come after the Treasury Department, the Federal Reserve and the Federal Deposit Insurance Corporation announced on Sunday evening that depositors for Silicon Valley Bank would have access to their money on Monday.

“No losses — and this is an important point — no losses will be borne by the taxpayers,” the president said. “Instead the money will come from the fees that banks pay into the deposit insurance fund.”

Eric Garcia reports from Washington, DC.

Biden says banking system is ‘safe’ after Silicon Valley Bank collapse

Voices: The Silicon Valley Bank collapse has made three things horrifically clear

01:45 , Oliver O'Connell

David Callaway writes:

Silicon Valley Bank is no Lehman Brothers moment.

Of that we were assured by regulators, banking executives and any number of media pundits over the weekend, who took pains to draw SVB’s collapse as an outlier. But as the shock waves spread around the world Sunday, from Wall Street and here in London to Asia, it became horrifically clear that an entire new and important asset class would now need to be protected – climate tech.

Read more:

The Silicon Valley Bank collapse has made three things horrifically clear

What you need to know about the Silicon Valley Bank collapse

00:45 , Oliver O'Connell

Two large banks that cater to the tech industry have collapsed after a bank run, government agencies are taking emergency measures to backstop the financial system, and President Joe Biden is reassuring Americans that the money they have in banks is safe.

It’s all eerily reminiscent of the financial meltdown that began with the bursting of the housing bubble 15 years ago. Yet the initial pace this time around seems even faster.

Over the last three days, the U.S. seized the two financial institutions after a bank run on Silicon Valley Bank, based in Santa Clara, California. It was the largest bank failure since Washington Mutual went under in 2008.

How did we get here? And will the steps the government unveiled over the weekend be enough?

Here are some questions and answers about what has happened and why it matters:

Silicon Valley Bank collapse: What you need to know

Over £50bn wiped off FTSE 100 amid banking stock sell-off

Monday 13 March 2023 23:45 , Oliver O'Connell

More than £50 billion has been wiped off the UK’s biggest stock market on Monday after the second and third biggest bank failures in US history spooked investors across the globe.

The collapse of tech-focused Silicon Valley Bank sparked fears across Wall Street that the banking system was being crippled by a relentless cycle of interest rate rises.

Read more:

More than £50bn wiped off FTSE 100 amid banking stock sell-off

Premium: Silicon Valley rescue saves UK tech industry – but shares in other banks plummet

Monday 13 March 2023 23:00 , Oliver O'Connell

Britain’s tech industry was saved from a crisis on Monday after HSBC rescued the UK arm of Silicon Valley Bank in a deal brokered by the government and the Bank of England.

Read more:

Silicon Valley rescue saves UK tech industry – but shares in other banks plummet

Start-ups, small businesses and online sellers despair at frozen funds

Monday 13 March 2023 22:15 , Oliver O'Connell

It’s not just large tech firms and venture capital funds caught up in the collapse of Silicon Valley Bank. There are numerous small businesses, kitchen table start-ups and side-hustle online retailers impacted by the sudden bank failure.

They range from business owners unable to pay employees to Etsy sellers worried about paying bills as online payments stalled.

Many have taken to social media to vent their frustrations.

Online retailers despair in wake of Silicon Valley Bank collapse

Voices: The ghosts of the 2008 financial crisis loom over Biden’s response to Silicon Valley Bank

Monday 13 March 2023 21:45 , Oliver O'Connell

Eric Garcia writes:

When President Joe Biden announced on Monday that people who had deposited their money in the now-unraveled Silicon Valley Bank would have their money available, he emphasised that American taxpayers would not be left on the hook.

Similarly, he added that the people responsible at the bank would need to be fired and that investors in Silicon Valley Bank would not be made whole, arguing that they took a risk and now have to suffer the losses.

On the surface, the Silicon Valley Bank collapse, as well as the closing of Signature Bank in New York, appears quite similar to the 2008 financial crisis that took banks like AIG to the brink and led to the collapse of Lehman Brothers. At the time, Mr Biden was a sitting senator running for vice president alongside Barack Obama. Both of them, as well as their White House opponent at the time, voted for the Troubled Assets Relief Program, or TARP, which became known as the “bailout” in the popular imagination.

But there are important distinctions between 2008 and today.

Read on:

Ghosts of the 2008 financial crisis loom over Biden’s response to Silicon Valley Bank

Shopify CEO: ‘Very minor impact for us'

Monday 13 March 2023 21:30 , Oliver O'Connell

Tobi Lutke, CEO of e-commerce platform Shopify, shared an email sent out to merchants offering to help if their funds were frozen at Silicon Valley Bank and confirmed that the collapse of the bank had only had “very minor impact for us”.

Watch: Ro Khanna says stock sale money should be ‘clawed back’ for depositors

Monday 13 March 2023 21:16 , Oliver O'Connell

Fed’s top regulator to lead review of supervision of SVB

Monday 13 March 2023 21:05 , Oliver O'Connell

The Federal Reserve Board on Monday announced that Vice Chair for Supervision Michael S Barr is leading a review of the supervision and regulation of Silicon Valley Bank, in light of its failure. The review will be publicly released by 1 May.

“The events surrounding Silicon Valley Bank demand a thorough, transparent, and swift review by the Federal Reserve,” said Chair Jerome H. Powell.

“We need to have humility, and conduct a careful and thorough review of how we supervised and regulated this firm, and what we should learn from this experience,” said Vice Chair Barr.

Democrat lawmaker posts TikTok Silicon Valley Bank explainer

Monday 13 March 2023 20:45 , Oliver O'Connell

Democratic Rep Jeff Jackson of North Carolina has posted a helpful explainer about the Silicon Valley Bank collapse to TikTok in which he lays out as clearly as possible what happened to the doomed bank, what the federal government is doing about it, and why it is important not to panic.

Watch below:

Warren: ‘We need stronger rules and stronger oversight of banks like SVB'

Monday 13 March 2023 20:40 , Oliver O'Connell

FDIC planning another auction of Silicon Valley Bank

Monday 13 March 2023 20:30 , Oliver O'Connell

Per The Wall Street Journal:

Regulators are planning to take another crack at auctioning failed Silicon Valley Bank, according to people familiar with the matter, after they were unable to find a buyer for the firm over the weekend.

Officials from the Federal Deposit Insurance Corp told Senate Republicans on Monday that they had additional flexibility to sell the firm now that regulators had declared its failure a threat to the financial system, according to people familiar with the briefing and notes on the discussion reviewed by The Wall Street Journal.

Sliding bank shares drag Wall Street in choppy trade

Monday 13 March 2023 20:25 , Oliver O'Connell

Sliding bank shared dragged Wall Street on Monday with investors worried about contagion from the Silicon Valley Bank collapse, but trade was choppy and some sectors benefited from hopes the Federal Reserve could ease up on interest rate hikes.

SVB Financial's sudden shutdown on Friday after a failed capital raise had investors worried about risks to other banks from the Fed's sharp rate hikes over the last year. But many speculated the central bank could now become less hawkish, and the yield on the 2-year Treasury tumbled.

Regulators over the weekend stepped in to restore investor confidence in the banking system, saying SVB's depositors will have access to their funds on Monday.

To some investors, the Fed's decision next week will also hinge on inflation data due this week.

"If we get shockingly bad Consumer Price Index and Producer Price Index, the Fed is going to find itself in a tough spot or a much tougher spot that it even finds itself in ahead of those prints," said Orion Advisor Solutions CIO Timothy Holland.

According to preliminary data, the S&P 500 lost 5.82 points, or 0.16%, to end at 3,855.54 points, while the Nasdaq Composite gained 49.74 points, or 0.45%, to 11,188.63. The Dow Jones Industrial Average fell 86.66 points, or 0.27%, to 31,822.08.

The benchmark S&P 500 is now up about 1% for the year so far. Earlier in the session it fell, briefly erasing all the year-to-date gains.

Reuters

SVB CEO and CFO hit with class action suit

Monday 13 March 2023 20:05 , Oliver O'Connell

A class action suit has been filed against Silicon Valley Bank CEO Greg Becker and Chief Financial Officer Daniel Beck over the bank’s collapse.

Filed today in the Northern District of California, the suit claims that the company misled stockholders about the bank’s ability to deal with potential risks such as rising interest rates.

It claims both Mr Becker and Mr Beck “knew that the public documents and statements issued or disseminated in the name of the Company were materially false and misleading”.

Read the full filing here.

Thiel group withdrew all funds from Silicon Valley Bank before collapse, report says

Monday 13 March 2023 19:45 , Oliver O'Connell

Peter Thiel’s Founders Fund withdrew all of its funds from Silicon Valley Bank before the bank collapsed, according to reporting by Bloomberg.

A source said that the fund — started by PayPal cofounder Thiel — began experiencing problems using the bank’s services and decided to close its exposure.

The group was in the midst of asking investment partners to send funds to invest in a company to its SVB account but they did not immediately go through as expected. They were instructed to send the funds to other banks instead.

Founders Fund was not alone in withdrawing money from SVB as other venture funds took steps to limit their exposure as the bank descended into chaos.

The source did not tell Bloomberg if the group’s cash withdrawals happened on Thursday when worries about the state of the bank really took off, or if this occurred prior to that.

Germany imposes moratorium on German SVB branch

Monday 13 March 2023 19:15 , Oliver O'Connell

Germany’s financial regulator BaFin on Monday said it was imposing a moratorium on the German branch of Silicon Valley Bank in the wake of its demise and noted the branch has “no systemic relevance”.

The bank opened a small branch in 2018 after it won a license to lend.

BaFin said that the situation posed no “threat to financial stability”.

Reuters

Bernie Sanders blames bank collapse on Trump

Monday 13 March 2023 19:00 , Oliver O'Connell

Senator Bernie Sanders issued the following statement on the collapse of Silicon Valley Bank:

“Let’s be clear. The failure of Silicon Valley Bank is a direct result of an absurd 2018 bank deregulation bill signed by Donald Trump that I strongly opposed. Five years ago, the Republican Director of the Congressional Budget Office released a report finding that this legislation would ‘increase the likelihood that a large financial firm with assets of between $100 billion and $250 billion would fail’.

“Unfortunately, that is precisely what happened. During the debate over the legislation I said: ‘Are our memories so short that we learned nothing from the 2008 Wall Street crash? Have we learned nothing from the Savings and Loan disaster of the early 1990s or the thievery of Wells Fargo over the last couple of years or the dishonesty of Equifax or the accounting fraud at Enron and Arthur Anderson or the failure of Long-Term Capital Management or the billions of dollars in fines that financial institution after financial institution has paid out for illegal or deceptive activities?’ Sadly, the Republican Congress and the Trump Administration answered all of these questions with a resounding NO.

“Now is not the time for US taxpayers to bail out Silicon Valley Bank. If there is a bailout of Silicon Valley Bank, it must be 100 per cent financed by Wall Street and large financial institutions. We cannot continue down the road of more socialism for the rich and rugged individualism for everyone else. Let us have the courage to stand up to Wall Street, repeal the disastrous 2018 bank deregulation law, break up too-big-to-fail banks and address the needs of working families, not the risky bets of vulture capitalists.”

Haley attacks Biden’s ‘bailout’ of Silicon Valley Bank

Monday 13 March 2023 18:30 , Oliver O'Connell

Republican presidential candidate and former US Ambassador to the UN Nikki Haley has called on President Joe Biden to be upfront with the American people about the “bailout” of Silicon Valley Bank.

In a statement, the former South Carolina governor said: “Joe Biden is pretending this isn’t a bailout. It is. Now depositors at healthy banks are forced to subsidise Silicon Valley Bank’s mismanagement. When the Deposit Insurance Fund runs dry, all bank customers are on the hook. That’s a public bailout.”

She adds: “Depositors should be paid by selling off Silicon Valley Bank’s assets, not by the public. Taxpayers should not be responsible.”

Timeline: Collapse of Silicon Valley Bank

Monday 13 March 2023 18:15 , Oliver O'Connell

Visual Capitalist prepared this helpful timeline of the collapse of Silicon Valley Bank over a 10-day period since the end of February.

Canadian regulator takes control of SVB’s Toronto branch

Monday 13 March 2023 18:00 , Oliver O'Connell

Canada’s Superintendent of Financial Institutions has taken temporary control of the assets of the Canadian branch of Silicon Valley Bank, as well as issuing notice that he intends to seek permanent control of its assets and requesting that the Attorney General of Canada apply for a Winding-Up Order.

Silicon Valley Bank operates in Canada as a Foreign Bank Branch based in Toronto that is supervised by the Office of the Superintendent of Financial Institutions (OSFI). Its business in Canada is primarily lending to corporate clients. This branch does not hold any commercial or individual deposits in Canada.

Peter Routledge, Superintendent of Financial Institutions, said: “By taking temporary control of the Canadian branch of Silicon Valley Bank, we are acting to protect the rights and interests of the branch’s creditors. I want to be clear: the Silicon Valley Bank branch in Canada does not take deposits from Canadians, and this situation is the result of circumstances particular to Silicon Valley Bank in the United States.”

Congress enabled Silicon Valley Bank collapse, says Warren

Monday 13 March 2023 17:45 , Oliver O'Connell

Senator Elizabeth Warren says that Congress enabled the collapse of Silicon Valley Bank. Writing in The New York Times on Monday, the longtime foe of Wall Street deregulation pointed the finger squarely at bank executives pressuring Congress to weaken the Dodd-Frank Act put in place after the 2008 financial crisis.

She writes:

Greg Becker, the chief executive of Silicon Valley Bank, was one of the ‌many high-powered executives who lobbied Congress to weaken the law. In 2018, the big banks won. With support from both parties, President Donald Trump signed a law to roll back critical parts of Dodd-Frank. Regulators, including the Federal Reserve chair Jerome Powell, then made a bad situation worse, ‌‌letting financial institutions load up on risk.

Banks like SVB ‌— which had become the 16th largest bank in the country before regulators shut it down on Friday ‌—‌ got relief from stringent requirements, basing their claim on the laughable assertion that banks like them weren’t actually “big” ‌and therefore didn’t need strong oversight. ‌

Senator Warren says she warned about these risks in 2018 and wishes she had been wrong.

Voices: The Silicon Valley Bank collapse has made three things horrifically clear

Monday 13 March 2023 17:30 , Oliver O'Connell

David Callaway writes:

Silicon Valley Bank is no Lehman Brothers moment.

Of that we were assured by regulators, banking executives and any number of media pundits over the weekend, who took pains to draw SVB’s collapse as an outlier. But as the shock waves spread around the world Sunday, from Wall Street and here in London to Asia, it became horrifically clear that an entire new and important asset class would now need to be protected – climate tech.

Read more:

The Silicon Valley Bank collapse has made three things horrifically clear

Monday 13 March 2023 17:15 , Oliver O'Connell

Is this another Lehman Brothers moment?

Monday 13 March 2023 17:00 , Oliver O'Connell

While the failure of two banks in three days has spooked investors and brought back memories of the collapse of Lehman Brothers in 2008, the two situations are, for now, quite different.

Lehman Brothers was brought down by having large holdings of subprime mortgage debt, something that was found on the balance sheet of every large bank, which was why the federal government needed to step in to prevent a complete collapse.

In the case of Silicon Valley Bank, its business is very focused on tech and venture capital firms as well as some other regional businesses in California. As the tech industry losses grew in recent months the bank got into increasing difficulty as its clients withdrew more and more money as borrowing became more expensive due to interest rate hikes.

SVB unloaded its holdings of Treasury bonds, which were also depressed, in an attempt to raise funds to cover the withdrawals. Having sold a $21bn portfolio at a loss of $1.8bn concerns grew about the bank’s stability and its clients rushed to pull their deposits.

Larger banks such as Citi, Bank of America, and JP Morgan have much more diverse businesses and so they have not seen a large proportion of their depositors attempting to withdraw their funds as SVB saw. There is no run on the banks.

What the SVB situation tells us is that Federal Reserve rate increases to tackle inflation have depressed the value of Treasury bonds which every major bank holds. Therefore it is likely, as Goldman Sachs has said, that the Fed will hold off on its next interest rate hikes.

Western Alliance Bank strengthening liquidity position as outflows are moderate

Monday 13 March 2023 16:50 , Oliver O'Connell

Arizona-based Western Alliance Bank President and CEO Kenneth Vecchione issued a statement this morning about the health of the bank.

Western Alliance has taken additional steps to strengthen its liquidity position to ensure that we are in a position to meet all of our client funding needs, including increasing our borrowing capacity. As of this morning, cash reserves exceed $25 billion and are growing, while deposit outflows have been moderate. Including accounts eligible for pass-through insurance, insured deposits exceed 50% of total deposits.

We also welcome the banking agencies’ statement yesterday expressing their commitment to ensuring liquidity within the banking system, and their confidence in the strength of the banking industry.

Chinese start-ups scramble for alternatives to SVB

Monday 13 March 2023 16:30 , Oliver O'Connell

Stunned by the sudden collapse of Silicon Valley Bank, the main go-to foreign bank for the majority of Chinese start-ups, entrepreneurs and venture funds are scrambling for alternatives despite US regulators averting a banking crisis by guaranteeing all deposits of the troubled bank.

Chinese start-ups and fund managers said they are still looking to move their money out of SVB once they can. Some of them are turning to bigger US banks, while a few Chinese lenders such as China Merchants Bank and the Industrial & Commercial Bank of China are also rushing to fill the gap.

Such banks have offered account services similar to those of SVB, but found it hard to crack the US bank’s dominance among early-stage start-ups in China, where SVB has operated for more than two decades and has a local joint venture.

As SVB was one of the few banks that made it easy for start-ups to open bank accounts for dollar financing, it was the dominant foreign bank of choice for young companies in China, advisors and companies said.

Reuters

VIDEO: Silicon Valley Bank collapse: HSBC moves to buy SVB subsidiary in the UK

Monday 13 March 2023 16:00 , The Independent

As Dow jumps 200 points, trading in regional bank stocks halted

Monday 13 March 2023 15:45 , Oliver O'Connell

The Dow Jones Industrial Average jumped some 200 points on Monday morning as investors sought areas removed from the banking industry to park money during the current volatility.

At the same time, regional and specialised banks similar in size to Silicon Valley Bank and Signature Bank saw trading halted after circuit breakers were triggered to prevent a crash in their value.

Western Alliance, based in Arizona, was down 80 per cent on early trading; First Republic Bank dropped 75 per cent; both Comerica and East West Bancorp fell around 30 percent; and Zions Bancorp in Utah fell 20 per cent.

There were smaller drops in the value of larger financial institutions such as Citi, Wells Fargo, Bank of America, and JP Morgan Chase.

FTSE 100 suffers sharp fall as HSBC buys Silicon Valley Bank UK for £1

Monday 13 March 2023 15:30 , Holly Williams

London’s FTSE 100 Index has tumbled further as banks remained in the red amid fallout from the collapse of Silicon Valley Bank despite emergency action in the US to protect customers and a rescue deal in the UK.

The top tier fell nearly 2% in morning trading on Monday, down 132.2 points at 7616.2, with banks and financial stocks extending share losses seen on Friday.

HSBC’s £1 deal to take over the UK arm of failed Silicon Valley Bank (SVB UK) did not halt the slide on the London market as fears over contagion mounted.

The US government took extraordinary steps to stop a potential banking crisis, moving to protect all depositor cash after last Friday’s collapse of California-based SVB.

Read more:

FTSE 100 suffers sharp fall as HSBC buys Silicon Valley Bank UK for £1

Biden says banking system is ‘safe’, vows accountability for executives

Monday 13 March 2023 15:15 , Oliver O'Connell

President Joe Biden reassured Americans that the nation’s banking system is safe after Silicon Valley Bank collapsed last week and said there would be accountability for financial executives.

The president’s actions come after the Treasury Department, the Federal Reserve and the Federal Deposit Insurance Corporation announced on Sunday evening that depositors for Silicon Valley Bank would have access to their money on Monday.

“No losses, and this is an important point, no losses will be borne by the taxpayers,” the president said. “Instead the money will come from the fees that banks pay into the deposit insurance fund.”

Eric Garcia reports from Washington, DC.

Biden says banking system is ‘safe’ after Silicon Valley Bank collapse

What happened to Silicon Valley Bank?

Monday 13 March 2023 15:00 , Rachel Sharp

On Friday, California regulators shut down Silicon Valley Bank (SVB) in what brought back memories of the dark days of the financial crash.

The bank’s collapse came just 48 hours after it announced it had sold off a load of securities at a loss and planned to sell $2.25bn in new shares to shore up its balance sheet.

This sparked a panic among depositors who rushed to withdraw their money, creating a run on the bank and sending shares plummeting.

In pre-market trading on Friday, share price fell a staggering 66 per cent.

Trading was halted and California regulators stepped in, shuttering the bank in the middle of the trading day and appointing the Federal Deposit Insurance Corporation (FDIC) as receiver.

It marked the biggest US bank collapse since Washington Mutual failed during the height of the 2008 financial crisis.

On Sunday, a second bank – New York-based Signature Bank – was then also shut down by regulators in a move to prevent an escalating crisis. Signature Bank is one of the biggest banks to the cryptocurrency industry.

California Rep Katie Porter says SVB collapse ‘totally avoidable'

Monday 13 March 2023 14:45 , Oliver O'Connell

Rep Katie Porter of California’s 47th congressional district says the collapse of Silicon Valley Bank was totally avoidable and warned even before joining Congress that the 2018 deregulation bill allowed banks to take reckless risks.

SVB's Canadian branch is taken over by country's banking regulator following collapse

Monday 13 March 2023 14:30 , Rachel Sharp

The Canadian branch of collapsed US bank Silicon Valley Bank has been taken over by the country's banking regulator.

Canada’s Office of the Superintendent of Financial Institutions (OSFI) announced on Sunday that it was taking temporary control of SVB’s unit in the country and is seeking to gain permanent control of the branch’s assets.

“By taking temporary control of the Canadian branch of Silicon Valley Bank, we are acting to protect the rights and interests of the branch’s creditors,” Peter Routledge, the superintendent of financial institutions, said in a statement.

SVB has operated in Canada since 2019 and had C$435m ($315.33m) in secured loans at the end of 2022.

The move came after SVB collapsed on Friday, marked the biggest US bank failure since the 2008 global financial crisis and the second-biggest in American history.

Fear grips Wall Street as bank stocks plunge after collapse of Silicon Valley Bank and Signature Bank

Monday 13 March 2023 14:12 , Oliver O'Connell

Fear is gripping Wall Street about what’s next to topple following the second- and third-largest bank failures in US history, and stocks are falling Monday as investors scramble to find someplace safe to park their money.

The S&P 500 was 1.1 per cent lower in early trading, with the heaviest losses coming from banks. Investors are worried that a relentless rise in interest rates meant to get inflation under control are approaching a tipping point and may be cracking the banking system and broader economy. The US government announced a plan late Sunday meant to shore up the banking industry following the collapses of Silicon Valley Bank and Signature Bank since Friday.

The most pressure is on the regional banks one or two steps below in size of the massive, “too-big-to-fail” banks that helped take down the economy during the 2008 financial crisis. Shares of First Republic plunged 66.9 per cent, even after the bank said Sunday it had strengthened its finances with cash from the Federal Reserve and JPMorgan Chase.

Fear grips Wall Street as stocks plunge after banks collapse

Bitcoin price bounces back as Silicon Valley Bank rescued

Monday 13 March 2023 14:00 , Rachel Sharp

Bitcoin has seen a sudden price rebound at the start of the week, rising nearly 10 per cent in the space of a few hours after fears about a potential banking crisis subsided.

The world’s leading cryptocurrency briefly dipped below $20,000 on Friday – its lowest level since the start of the year – following the collapse of crypto-friendly Silvergate Bank and fears about Silicon Valley Bank appeared to spook investors.

Bitcoin rallied after the US government said it would protect customers’ funds, while banking giant HSBC agreed to buy the UK operations of SVB.

Read the full story:

Bitcoin price bounces back as Silicon Valley Bank rescued

‘This is not a bailout of government taxpayer dollars'

Monday 13 March 2023 13:57 , Gustaf Kilander

Ms Hochul said on Monday that the FDIC is in charge of Signature Bank and they'll be “communicating any further ... details about the future, but basically, the management has changed”.

“This is not a bailout of government taxpayer dollars,” she added. “This is simply using fees that are assessed on all banks by the FDIC” for “such a time they would need them so that money is there”.

She emphasized that “it's not from the taxpayers” and added that “there's new leadership” at the bank.

“So this is not continuing” with “the existing leadership that led the bank” into this situation.

‘Uncertainty could lead others to flee regional banks’

Monday 13 March 2023 13:47 , Gustaf Kilander

Ms Hochul said on Monday that “people this morning waking up and deciding to take their money out of a bank because of uncertainty could lead others to flee regional banks”.

“And that would create incredible instability in a sector of the banking community that we think is critically important, and that would have had large ripple effects throughout the economy because these banks do hold deposits from small businesses and consumers, including those in the innovation economy, which is critically important to our lifecycle here in New York State,” she added.

New York State Department of Financial Services takes over Signature Bank

Monday 13 March 2023 13:43 , Gustaf Kilander

New York Governor Kathy Hochul said on Monday that “the New York State Department of Financial Services took possession of a New York Chartered Bank known as Signature last night”.

“While that sounds extraordinary, that is what happens in terms of the transition from a temporary hold by the state and it's merely turned over to the FDIC,” she said.

“And this all is in the aftermath of what happened on Friday ... [with] Silicon Valley Bank out in California. And this had an effect on a bank here in particular Signature Bank,” she added.

Bank stocks plunge at the open on Wall Street

Monday 13 March 2023 13:36 , AP

Bank stocks plunge at the open on Wall Street following failures of two banks; investors seeking safety rush into bonds.

Biden to ask Congress ‘to strengthen the rules for banks'

Monday 13 March 2023 13:31 , Gustaf Kilander

Mr Biden spoke of the possible measures being taken to prevent a similar crisis from happening again.

He spoke of the requirements put in place during the Obama-Biden administration, and he criticised the Trump administration for rolling some of them back.

“I’m going to ask Congress and the banking regulators to strengthen the rules for banks, to make it less likely this kind of bank failure would happen again,” Mr Biden said. “And to protect American jobs and small businesses.”

‘Investors in the banks will not be protected’

Monday 13 March 2023 13:19 , Gustaf Kilander

Mr Biden said on Monday that “investors in the banks will not be protected”.

“They knowingly took a risk. And when the risk didn't pay off, investors lose their money. That's how capitalism works,” he added.

PHOTOS: Biden speaks on banking system

Monday 13 March 2023 13:16 , Gustaf Kilander

‘The management of these banks will be fired'

Monday 13 March 2023 13:14 , Gustaf Kilander

Mr Biden emphasized that “no losses will be borne by the taxpayers. Instead, the money will come from the fees that banks pay into the Deposit Insurance Fund”.

“The management of these banks will be fired. If the bank is taken over by FDIC, the people running the bank should not work there anymore,” Mr Biden said.

‘Your deposits will be there when you need them'

Monday 13 March 2023 13:10 , Gustaf Kilander

Mr Biden said in his speech on Monday that “Americans can have confidence that the banking system is safe”.

“Your deposits will be there when you need them. Small businesses across the country that have deposit accounts at these banks can breathe easier knowing they’ll be able to pay their workers and pay their bills,” he added.

‘No losses borne by the taxpayers’

Monday 13 March 2023 13:05 , Gustaf Kilander

Mr Biden said on Monday morning that no losses will be borne by the taxpayers.

“Treasury Secretary Yellen and a team of banking regulators have taken immediate action ... all customers ... can rest assured ... they will be protected, and they'll have access to their money as of today. That includes small businesses across the country that bank there and need to make payroll, pay their bills and stay open for business – no losses. And this is an important point – no losses will be borne by the taxpayers,” he said.

Watch live as Biden speaks on US financial system following collapse of Silicon Valley Bank

Monday 13 March 2023 12:58 , Oliver Browning

Watch live as Joe Biden is set to address the nation on Monday (13 March) following the collapse of Silicon Valley Bank.

In a statement on Sunday evening, the president said that he will deliver remarks on how the US will maintain a resilient banking system to protect America’s “historic economic recovery”.

“Over the weekend, and at my direction, the Treasury Secretary and my National Economic Council Director worked diligently with the banking regulators to address problems at Silicon Valley Bank and Signature Bank,” Mr Biden said.

“I am pleased that they reached a prompt solution that protects American workers and small businesses, and keeps our financial system safe. The solution also ensures that taxpayer dollars are not put at risk.”

The president added that he is “firmly committed to holding those responsible for this mess fully accountable”.

California regulators shut down Silicon Valley Bank last Friday, marking the biggest US bank failure since the 2008 global financial crisis.

First Republic Bank’s shares halve in premarket trading

Monday 13 March 2023 12:50 , Rachel Sharp

Shares in First Republic Bank more than halved in premarket trading on Monday amid ongoing concerns about the stability of global finances following the collapse of Silicon Valley Bank.

First Republic on Sunday said it had secured additional financing through JPMorgan Chase & Co (JPM.N), giving it access to a total of $70 billion in funds through various sources.

The lender also said it had an additional borrowing facility from the U.S. Federal Reserve.

Despite the cash infusion, Raymond James double downgraded the bank’s stock to “market perform” from “strong buy”, highlighting the risk of deposit outflows that First Republic faces from panicked large depositors after the bank run at SVB last week.

The bank’s stock was last down 74% at $21.11 on Monday.

“While the bank (SVB) is better positioned for potential deposit outflows on Sunday evening than it may have been earlier in the weekend, if there are net deposit outflows, it will shrink the EPS power of the bank,” Raymond James analyst David Long wrote in the note.

US authorities launched emergency measures on Sunday to shore up confidence in the banking system after the failure of Silicon Valley Bank (SIVB.O) threatened to trigger a broader financial crisis.

First Republic’s shares were leading losses among other regional lenders, with Western Alliance (WAL.N) down over 26% in trading before the bell.

Additional reporting from Reuters

Biden unlikely to bail out Silicon Valley Bank

Monday 13 March 2023 12:40 , Rachel Sharp

Washington appears to have reached its limit with the buckwild investing and carefree nature of America’s finance and tech sectors and this weekend signalled that a bailout for Silicon Valley Bank, which is now in danger of being unable to ensure all uninsured deposits, is unlikely.

That’s bad news for the companies and individuals with uninsured stakes in the massive institution, which was known for catering to an exclusive clientele in the tech industry. As investors blame a handful of venture capitalists for triggering the bank run, most were hoping that Washington would provide at least some relief in the event that the bank’s assets cannot be bought by another, healthier firm.

Though there was support for such action in the centrist wings of the GOP and Democratic Party alike, the White House’s position was laid out this weekend by Janet Yellen, chair of the Federal Reserve.

Read the full story here:

Biden unlikely to bail out Silicon Valley Bank, as right calls failed bank ‘woke’

US government introduces emergency measures

Monday 13 March 2023 12:25 , Rachel Sharp

While the Biden administration has signalled it has no intentions of bailing out the banks, it has introduced emergency measures to protect the US economy and give bank clients access to their funds at no cost to US taxpayers.

Secretary of the Treasury Janet Yellen, Federal Reserve Board Chair Jerome Powell, and FDIC Chairman Martin Gruenberg released a joint statement on Sunday announcing the steps.

“Today we are taking decisive actions to protect the U.S. economy by strengthening public confidence in our banking system,” they said.

“After receiving a recommendation from the boards of the FDIC and the Federal Reserve, and consulting with the President, Secretary Yellen approved actions enabling the FDIC to complete its resolution of Silicon Valley Bank, Santa Clara, California, in a manner that fully protects all depositors.

“Depositors will have access to all of their money starting Monday, March 13. No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer.”

The Federal Reserve Board will also make additional funding available to eligible depository institutions to help assure banks have the ability to meet the needs of all their depositors.

“The US banking system remains resilient and on a solid foundation, in large part due to reforms that were made after the financial crisis that ensured better safeguards for the banking industry. Those reforms combined with today’s actions demonstrate our commitment to take the necessary steps to ensure that depositors’ savings remain safe,” the statement added.

Those with money at the banks will have full access to it from Monday and no losses will be borne by the taxpayer.

However, the regulators said that there will be no bailouts for the banks and some shareholders and unsecured creditors will lose all of their investments.