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Business News/ News / World/  SVB updates: Swiss govt 'pressured' by another nation to intervene on Credit Suisse, says Report
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SVB updates: Swiss govt 'pressured' by another nation to intervene on Credit Suisse, says Report

Silicon Valley Bank Highlights: Credit risk indicators flashed red on Monday, as investors worried about contagion risks across corporate debt markets after the collapse of Silicon Valley Bank (SVB) and New York's Signature Bank in the space of 72 hours

Silicon Valley Bank crisis: US authorities swooped in and seized the assets of SVB, a key lender to US startups since the 1980s (AFP)Premium
Silicon Valley Bank crisis: US authorities swooped in and seized the assets of SVB, a key lender to US startups since the 1980s (AFP)

The collapse of the Silicon Valley Bank has rocked the markets, raising concerns that other banks could be facing similar problems. On Friday last week, the regulators took control of SVB – a key lender to startups across the US since the 1980s – after a huge run on deposits left the medium-sized bank unable to stay afloat on its own.

On Sunday, US authorities unveiled sweeping measures to rescue depositors' money at the failed SVB.

Meanwhile, the bank's UK arm will is being acquired by HSBC Holdings Plc, the culmination of a frantic weekend where ministers and bankers explored various ways to avert the SVB unit’s collapse.

14 Mar 2023, 05:45:31 PM IST

Will take up SVB-linked startups woes with FinMin, says MoS IT Rajeev Chandrasekhar

The IT ministry will take up woes of Indian startups impacted by the Silicon Valley Bank collapse with the finance ministry to help them navigate through the crisis and address the immediate liquidity crunch they are facing, Union Minister Rajeev Chandrasekhar said on Tuesday.

The Minister of State for Electronics and IT during interactions with startups asked them to engage with the Indian banking system, which has been very robust and assured them of resolving teething issues they may face.

Though startups and venture capitalists said that the US government authorities have assured of returning full money to the depositors, there is no clarity on the timelines, which will lead to a liquidity crunch in the firms that have been impacted by the SVB collapse, according to the minister. (Read more)

14 Mar 2023, 05:24:33 PM IST

Dollar rises after tumbling on SVB collapse, with CPI data approaching

The dollar edged higher in calmer trading on Tuesday, after tumbling on Monday following the collapse of Silicon Valley Bank (SVB).

Tuesday's consumer price index (CPI) figures, due out at 8.30 a.m. ET (1230 GMT), have the potential to drive further volatility in global markets. They come a day after fears of a potential banking crisis caused traders to rapidly scale down their expectations for Federal Reserve rate hikes.

The euro was last 0.08% lower at $1.072 as the greenback bounced. It hit a one-month high of $1.075 on Monday and rose 0.85% across the session.

The dollar was up 0.61% to 134.02 yen , reversing some of Monday's 1.38% slide.

14 Mar 2023, 05:13:06 PM IST

European markets mixed, Asian shares fall amid bank worries

European markets were mixed Tuesday after a broad retreat in Asia as investors watched to see what’s next following the second- and third-largest bank failures in U.S. history.

Bank shares in Europe steadied, showing only modest losses. The STOXX Banks index comprising 21 leading European lenders dipped 0.8%, following steep plunges Monday that had some banks down more than 10% in intraday trading.

Bank shares stabilized following statements late Monday by the head of the group of finance ministers for the 20-country eurozone, Paschal Donohoe, that Europe had “no direct exposure" to Silicon Valley Bank in the U.S.

On Wall Street, the future for the S&P 500 was down 0.15%, while that for the Dow Jones Industrial Average was off 0.3%. On Monday, the S&P 500 dipped 0.2% and the Dow industrials fell 0.3%.

In Asian trading Tuesday, Japan's benchmark Nikkei 225 dropped 2.2% to finish at 27,222.04, extending losses from the day before.

Australia's S&P/ASX 200 dipped 1.4% to 7,008.90. South Korea's Kospi fell 2.6% to 2,348.97. Hong Kong's Hang Seng fell 2.3% to 19,247.96. The Shanghai Composite declined 0.7% to 3,245.31.

14 Mar 2023, 04:54:51 PM IST

US futures rise, treasuries fall before price data

Treasury yields climbed after epic declines and US equity futures rose on Tuesday as investors await inflation data that may upend bets that the Federal Reserve is done tightening.

The yield on the two-year Treasury — the most sensitive to interest rates — climbed about 25 basis points to 4.25%, still more than 70 basis points lower than this time last week. Plunging rates captured Wall Street’s attention yesterday, when the yield dropped more than a half-percentage point in the biggest move since the 1980s. The 10-year yield rose four basis points to 3.60%, while a gauge of the dollar snapped three days of losses.

Futures on the S&P 500 and Nasdaq 100 rose about 0.4% as regional banking stocks rallied in premarket trading. First Republic Bank, whose shares tumbled by a record 62% on Monday, jumped as much as 20%. Among larger lenders, Wells Fargo & Co. and Bank of America Corp. gained more than 3%.

14 Mar 2023, 04:43:19 PM IST

Gold rally cools as US CPI takes centre stage

Gold prices eased on Tuesday, pausing their sharp rally driven by the U.S. banking crisis, as the dollar rebounded, while traders positioned for inflation data that could also influence the Federal Reserve's interest rate strategy.

Spot gold was down 0.6% at $1,902.40 per ounce, as of 1057 GMT. U.S. gold futures fell 0.5% to $1,907.20.

Bullion prices rallied more than 2% in the previous two sessions as investors sought cover after the collapse of Silicon Valley Bank (SVB) spooked the market.

The dollar index was up 0.2%, making greenback-priced bullion less attractive for buyers holding other currencies. (Reuters)

14 Mar 2023, 04:13:16 PM IST

HSBC plans to inject £2 billion into Silicon Valley Bank’s UK division

HSBC Holdings Plc is planning to inject £2 billion ($2.4 billion) of liquidity into Silicon Valley Bank’s UK division, a move capping a frenzied weekend of talks that saw Europe’s largest lender take ownership of the stricken subsidiary.

Chief Executive Officer Noel Quinn and Ian Stuart, the head of HSBC UK, told London tech investors on a call Monday that the bank would commit billions of pounds to ensure that business-as-usual continued at SVB UK after it bought the unit for £1.

HSBC’s UK-based ring-fenced subsidiary, which is taking over the tech-focused lender, said in a statement that the deal will be funded from existing resources. Quinn described the acquisition as making “strategic sense" and said it would improve the bank’s standing in the technology and life-sciences sectors.

14 Mar 2023, 04:03:58 PM IST

Rupee logs worst day in five weeks as SVB crisis roils sentiment

The Indian rupee posted its worst performance against the dollar in five weeks on Tuesday, as fears of contagion from the collapse of Silicon Valley Bank (SVB) weighed on risk sentiment ahead of a key U.S. inflation data.

The rupee ended down 0.44% at 82.49 per dollar, marking its biggest percentage drop since February 6.

Traders were adding long USD/INR positions ahead of the U.S. inflation data that could influence the Federal Reserve's monetary policy decision next week.

14 Mar 2023, 03:46:19 PM IST

Credit Suisse CEO Says Bank Has No Material SVB Credit Exposure

Credit Suisse Group AG isn’t at risk from the collapse of Silicon Valley Bank, Chief Executive Officer Ulrich Koerner said Tuesday, after shares of the Swiss lender hit fresh lows this week.

“Our credit exposure to SVB in particular is not material," Koerner said at the Morgan Stanley European Financials Conference.

Credit Suisse stock has lost almost a fifth of its value in the past four trading days, as the failure of three regional US lenders prompted concerns about banks’ vulnerability to rising interest rates. Silicon Valley Bank’s seizure Friday, the biggest US bank failure since the financial crisis, was precipitated by fleeing depositors and sent shock waves across the global financial system.

As a systemically important bank, Credit Suisse follows “materially different standards" in terms of capital strength, funding and liquidity, Koerner said. He said the lender had CET1 capital ratio of 14.1% in the fourth quarter and a liquidity coverage ratio of 144% that has since increased.

14 Mar 2023, 03:27:22 PM IST

Shares tumble as stress creeps into markets

Global shares slid on Tuesday as a brewing U.S. banking crisis prompted investors to downgrade their expectations for interest rate hikes, even ahead of key inflation data later in the day.

In under a week, three U.S. banks have collapsed. It has been the failure of technology-sector lender Silicon Valley Bank (SVB) that has rattled investor confidence and triggered a rush into safe-haven assets like bonds and gold.

Banking stocks around the world have shed hundreds of billions of dollars in value in a matter of days, while the government bond market has seen one of its biggest rallies in decades.

The MSCI All-World index was down 0.5% on the day, largely due to steep declines across Asian equity markets, while in Europe shares entered a third day of declines, down 0.1%.

Short-dated U.S. Treasury yields rose 14 basis points to around 4.17%, but given that on Monday they posted their largest one-day drop since 1987, the rise on Tuesday still left yields at their lowest in six months. (Reuters)

14 Mar 2023, 03:13:37 PM IST

Asia Pacific lenders to see limited hit from US bank failures: Moody’s

Lenders in the Asia Pacific region are likely to see a limited impact of U.S. bank failures due to their stable funding sources and ample liquidity, Moody's Investors Service said on Tuesday.

Banks in the region, including China, Japan, Taiwan, India, Korea, Singapore, among others are "mostly funded with customer deposits, while their market borrowings are modest at about 16% of their total assets on average," the global ratings agency said in a note.

"Their business depositors are well diversified across different sectors, with no rated bank in the region being heavily exposed to technology companies."

U.S. state regulators closed New York-based Signature Bank on Sunday, the third largest failure in the country's banking history, two days after authorities shuttered Silicon Valley Bank, following mass withdrawals of customer deposits.

14 Mar 2023, 02:58:57 PM IST

Dollar rebounds after tumbling on SVB collapse, with US CPI data incoming

The dollar rose in somewhat calmer trading on Tuesday, after tumbling on Monday following the collapse of Silicon Valley Bank (SVB), as investors waited for the release of U.S. consumer inflation data later in the day.

Tuesday's consumer price index (CPI) figures have the potential to drive further volatility in global markets, coming a day after fears of a potential banking crisis caused traders to rapidly scale down their expectations for Federal Reserve rate hikes.

The euro was last 0.36% lower at $1.069 as the greenback bounced. It hit a one-month high of $1.075 on Monday and rose 0.85% across the session.

The dollar was up 0.79% to 134.25 yen, reversing some of Monday's 1.4% slide. (Reuters)

14 Mar 2023, 02:40:02 PM IST

SVB  employees angry with CEO for collapse

The blame game is on for who caused Silicon Valley Bank’s collapse, and the tech sector is pointing the finger at SVB CEO Greg Becker for allowing his company to go down in history as the second-biggest US banking failure on record.

One Silicon Valley Bank employee, who requested anonymity to speak candidly, was dumbfounded by how Becker publicly acknowledged the extent of the bank’s financial troubles before privately lining up the necessary financial support to ride out the storm, reported CNN.

This set the stage for the panic that ensued as customers scrambled to pull their money.

“That was absolutely idiotic," the employee, who works on the asset management side of Silicon Valley Bank, told CNN in an interview. “They were being very transparent. It’s the exact opposite of what you’d normally see in a scandal. But their transparency and forthright-ness did them in."

14 Mar 2023, 02:24:05 PM IST

European stocks mostly drop on bank contagion fears

European stock markets mostly fell at the open on Tuesday, as investors fretted over contagion fears after the collapse of two US lenders.

The failure of Silicon Valley Bank (SVB) on Friday, followed by Signature Bank days later, has sent shockwaves across trading floors worldwide.

In initial deals, London's benchmark FTSE 100 index fell 0.6 percent to 7,503.85 points compared with Monday's close.

HSBC topped the fallers board, sliding 2.5 percent one day after it agreed to buy SVB's UK division.

In the eurozone, the Paris CAC 40 index retreated 0.2 percent to 7,001.31, with Credit Agricole dipping 1.4 percent in value.

Frankfurt's DAX, however, rose nearly 0.1 percent to 14,968.48, but Commerzbank dipped 0.8 percent. (AFP)

14 Mar 2023, 01:54:14 PM IST

Depositors turn to JPMorgan and other US Banks post SVB collapse, report

After the demise of Silicon Valley Bank, other large banks of the US like JPMorgan Chase & Co and Citigroup Inc are flooded with requests from lenders for cash transfer, reported Reuters citing Financial Times report.

Other US banks are trying to accommodate these customers even by taking extra steps to speed up the normal sign-up process. The crisis has also led to fall in shares of regional banks of the USA such as First Republic Bank , Western Alliance and KeyCorp.

14 Mar 2023, 01:38:08 PM IST

Assicurazioni Generali SpA denies of any exposure to Silicon Valley Bank  

Global multi-line insurance company, Assicurazioni Generali SpA,  has no exposure to the collapsed Silicon Valley Bank, said the company's Chief Financial Officer, Cristiano Borean in post-results conference call.

14 Mar 2023, 01:21:19 PM IST

Gold price off 5-week high, but hovers above 1900 mark amid hopes of Fed pause due to SVB crisis

Gold prices slipped from their five week high mark on Tuesday, but continued to hover above $1900 level, amid the expectations of Fed rate pause due to Silicon Valley Bank collapse.

Spot gold was down 0.1% at $1,910.80 per ounce, as of 0726 GMT, after rising more than 2% on Monday to hit its highest since Feb. 3. U.S. gold futures also fell 0.1% to $1,915.00.

"Safe-haven flows in the aftermath of the SVB's fallout, along with a pullback in hawkish rate expectations, have been supportive of gold prices' upside over the past few days," Yeap Jun Rong, a market analyst, told Reuters.

14 Mar 2023, 01:03:07 PM IST

Digital Currency Group looking for new banking partners post US banks' collapse

Digital Currency Group, a venture capital currency focusing on digital currency market, is looking for a new banking partners for portfolio companies after the collapse of Silicon Valley Bank, Signature Bank and Silvergate, reported Reuters citing Coindesk.

14 Mar 2023, 12:50:30 PM IST

Australia shares suffer due to U.S. banks' collapse

The market weakening led by energy stocks resulted in the Australian shares to end on a lower note on Tuesday. The fears of the collapse of a US tech-focused lender led investors to put off bets on further rate hikes by the local central bank in April. 

The S&P/ASX 200 index ended 1.4% lower at 7,008.90, extending its rout into the third straight day. Akin to US market sentiment of US Fed putting a break on its aggressive rate hike cycle, investors were expecting the Reserve Bank of Australia (RBA) to leave the cash rate unchanged at 3.6%. The expectation is a complete reversal in sentiment from just a week ago when they wagered rates to peak at 4.2%. However, the domestic economic data will guide the central bank's moves on interest rates not the SVB collapse, analysts told Reuters.

14 Mar 2023, 12:21:19 PM IST

Tokyo stocks close down over 2% amid market fears emerged out US banks collapse 

Tokyo stocks ended sharply lower Tuesday, as investors remain risk averse despite US attempts to settle nerves after the spectacular collapse of Silicon Valley Bank.

The benchmark Nikkei 225 index was down 2.19 percent, or 610.92 points, to close at 27,222.04, while the broader Topix index plunged 2.67 percent, or 53.45 points, to 1,947.54. The dollar stood at 133.33 yen, against 133.22 yen in New York on Monday.

The collapse of Silicon Valley Bank on Friday, followed by Signature Bank days later, forced US authorities to immediately pledge support for other lenders and depositors.

The demise of SVB, which specialised in venture-capital financing mainly in the tech sector, was largely the result of the Fed's sharp interest rate hikes aimed at quelling inflation, which hit securities hard.

The SVB debacle has "brought on the highest volatile market conditions of 2023 so far", Stephen Innes of SPI Asset Management said in a note.

The effect reverberated throughout Japan's financial sector, too, prompting banking shares to tumble.

Sumitomo Mitsui Financial Group nosedived 7.56 percent to 5,240 yen and Daiichi Life Holdings tanked 7.28 percent to 2,444 yen.

(AFP)

14 Mar 2023, 12:03:02 PM IST

Dollar slumps as markets trim Fed hike expectations on US banks' fallout

The dollar hovered near a multi-week low on Tuesday amid fears of the transformation of expanding SVB impact into a systematic crisis. The collapse of the US tech-focused lender has left traders anticipating whether the Federal Reserve's rate hike has come to a halt or not. Market continued to remain under chaos on the second day after the collapse of Silicon Valley Bank(SVB). However, President Joe Biden's assurance provided some comfort to the banking system.

The US Dollar rose to an intraday peak of 134.03 yen and was last 0.48% higher at 133.87, reversing some of Monday's 1.4% slide, reported Reuters.

Similarly, the dollar pushed the euro and sterling some distance away from their one-month highs hit on Monday.

14 Mar 2023, 11:35:21 AM IST

Japan's financial system is stable, Japanese Minister on SVB impact

Japanese policymakers on Tuesday played down the risk of the economy taking a hit from the collapse of U.S. lender Silicon Valley Bank, even as fears of a contagion hit financial stocks and sent domestic share prices tumbling.

Speaking at a regular news conference, Economy Minister Shigeyuki Goto said the government was closely watching for any potential fallout on Japan's economy, but did not expect a major impact from the U.S. lender's collapse for now.

Finance Minister Shunichi Suzuki echoed the view, saying he saw the possibility of Japan's financial system being jolted by Silicon Valley Bank's collapse as small.

"We're seeing some risk-aversive moves in the market. But Japan's financial system is stable," Suzuki said at a separate news conference.

Japanese financial shares on Tuesday were set for their biggest plunge since the onset of the COVID-19 pandemic, as investors focused on the potential risk to commercial banks from their huge U.S. Treasury holdings.

(Reuters)

14 Mar 2023, 11:17:46 AM IST

Invesco, Franklin among firms that added SVB before collapse

Asset managers including Invesco Ltd. and Franklin Resources Inc. added shares of SVB Financial Group in the months before the collapse of Silicon Valley Bank wiped 60% off its stock value in a single day.

The firms, together with Two Sigma Investments, DE Shaw & Co., Renaissance Technologies LLC and BlackRock Inc., were among the top 10 buyers of the shares since September, according to data compiled by Bloomberg from fourth quarter and more recent regulatory filings and other fund documents.

Silicon Valley Bank’s technology startup clients and investors fled last week, spurring the second-biggest bank failure in US history. The swift collapse of the lender sent ripples through the tech and finance industries, prompting the government to protect client deposits.

SVB has lured some of the world’s biggest asset managers, ranging from passive to active investors and hedge funds. Franklin Resources’s nearly $7.2 billion Franklin Mutual Shares Fund owned $134 million worth of SVB shares at the end of January, according to a document. Several of the firm’s funds also had small exposure to debt of Silicon Valley Bank, failed Signature Bank and Silvergate as of March 9, according to a recent update posted on its website.

(Bloomberg)

14 Mar 2023, 11:07:36 AM IST

SVB collapse can halt the current cycle of Fed rate hike, say analysts

The unprecedented collapse of Silicon Valley Bank(SVB) last week could end the Federal Reserve's current cycle of interest rate hikes sooner than expected, says analysts. 

According to AFP, the traders and analysts who were expecting FED to raise interest rates in the coming months have now reversed their expectations. Many of them are saying the US central bank will hold its benchmark rate next week amid the chaos erupted due to the demise of Silicon Valley Bank. The SVB collapse has wiped out more than $465 billion in two days across global financial stock markets. Read full story here.

14 Mar 2023, 10:46:40 AM IST

First Republic and 5 US banks on Moody's downgrade watch

In the wake of the Silicon Valley Bank collapse, Moody's Investors Services placed First Republic Bank and five other US lenders on review for downgrade. The downgrade in status is the latest sign signalling the depleting health of regional financial firms following the collapse of Silicon Valley Bank.

In addition to SVB, the credit rating copany downgraded the status of Western Alliance Bancorp., Intrust Financial Corp., UMB Financial Corp., Zions Bancorp. and Comerica Inc.

The move comes after US bank stocks were pummeled, even as the government rescued SVB’s depositors and unveiled a new lending facility to support lenders’ financing and prevent more bank runs. Moody’s also downgraded Signature Bank and withdrew its credit rating, following the lender’s closure over the weekend. Read Full report here.

 

14 Mar 2023, 10:28:17 AM IST

Some U.S. banks facing stock rout may need to seek partners

Some U.S. regional banks are under pressure after the collapse of two lenders within days, with industry executives and advisers saying they could be forced to seek saviors if a rout in their stocks doesn't let up.

U.S. regulators announced extraordinary measures on Sunday following the collapse of SVB Financial Group and Signature Bank, offering a safety net to banks pressured by fleeing depositors. On Monday, President Joe Biden vowed to take action to ensure the safety of the banking system.

But the intervention did little to prop up the banks' shares, which slumped on Monday, posing a major impediment to growing their businesses and getting funding.

"If this continues to escalate you will have a liquidity drain from the mid to small banks," said David Ellison, a portfolio manager at Hennessy Funds, which had a position in Signature Bank.

Raising private capital could help inspire confidence again in their stocks. Possible outcomes for under-pressure regional banks could see a stronger rival take over a weaker, or cash infusions from investors such as private equity, the industry sources said.

Over the weekend, some private equity firms had studied the possibility of an investment in banks whose shares plummeted such as First Republic Bank and PacWest Bancorp , according to two industry sources with knowledge of the matter. They did not go ahead as the investors wanted to see what the government would do to alleviate pressure on the banking sector, the sources said.

(Reuters)

14 Mar 2023, 09:59:24 AM IST

$465 billion of wealth vanishes from global financial stocks amid SVB impact worry

As the Silicon Valley Bank collapse has forced the investors to cut their exposure to lenders, global financial stocks have lost around $464 billion in market value in two days.  

According to Bloomberg, the loss widened on Tuesday with the MSCI Asia Pacific Financials Index plumetting by 2.7% to the lowest since Nov. 29. Mitsubishi UFJ Financial Group Inc. slid as much as 8.3% in Japan, while South Korea’s Hana Financial Group Inc. fell 4.7% and Australia’s ANZ Group Holdings Ltd. lost 2.8%.

Market experts worry that the SVB-induced worry can impact the investments of financial firms in bonds and other instruments on the SVB-induced worry. Treasury yields plunged Monday amid expectations the Federal Reserve will hold off raising rates due to turmoil in the banking system.

14 Mar 2023, 09:45:55 AM IST

Oil prices fall $1 as SVB collapse spooks financial markets

As the SVB crisis continues to expand, oil prices fell more than $1 on Tuesday. The fall extended the previous day's slide. The widening impact of SVB demise has sparked fears about a fresh financial crisis.

Brent crude futures were down 87 cents, or 1.1%, at $79.90 a barrel at 0345 GMT. U.S. West Texas Intermediate crude futures (WTI) dropped 85 cents, or 1.1%, to $73.93 a barrel, reported Reuters. A day ago, Brent price crashed to its lowest level since early days of 2023, while WTI tumbled to its lowest since December.

The unprecedented shutdown of SVB Financial triggered concerns about risks to other banks due to the US Federal Reserve's share interest rate hike over the last year. It also forced the investors to wonder whether the US Fed might opt for a dovish stance in the coming time or not.

14 Mar 2023, 09:27:36 AM IST

SVB spillover effect: Indian rupee expected to under perform today

The Indian currency is expected to decline against the U.S. dollar on Tuesday, tracking losses in Asian equities and currencies as the ripple effect of Silicon Valley Bank collapse expand across the global market. Rupee fell 4 paise to 82.27 against US dollar in early trade on Tuesday.

The spillover impact of SVB demise was visible on most of Asian currencies which dropped between 0.2% to 0.4%. Shares in South Korea, Japan and Australia were all down about 2%.

Futures indicate that the Fed rate could peak at around 4.84% in May and cut rates from then on. The Fed policy rate is expected to be below 4% by December, marking a significant shift from the 5.64% peak prior to the collapse of SVB.

14 Mar 2023, 08:54:48 AM IST

Apollo Global among potential suitors for buying part of SVB loan book: Reports

Private Equity giant, Apollo Global Management, is reportedly interested in buying a part of loans held by the Silicon Valley Bank. Apollo, one of the world’s largest alternative asset managers, is among other investors looking to buy pieces of Silicon Valley Bank, reported Bloomberg quoting sources.

Meanwhile, a report on axios.com said JPMorgan and PNC are among the potential suitors that may acquire SVB Financial Group. The deal would exclude the commercial bank that is currently under U.S. government control.

14 Mar 2023, 08:52:44 AM IST

SVB's demise: Why didn't US bank regulators see it coming?

With hindsight, there were warning signs ahead of last week's spectacular collapse of Silicon Valley Bank, missed not only by investors, but by bank regulators.

Just why the oversight failed remained a hot question among banking experts Monday, with some focusing on the weakness of US rules.

The Federal Reserve announced Monday plans for a "thorough, transparent and swift" review of the supervision of SVB that will be publicly released on May 1, effectively acknowledging that it could have done better.

President Joe Biden promised a "full accounting of what happened," adding that he would ask regulators and banking regulators to tighten rules on the sector. {Read More}

14 Mar 2023, 08:18:23 AM IST

Silicon Valley Bank parent, CEO, CFO are sued by shareholders for fraud

After the worst bank collapse in the US in a decade, SVB Financial Group and two top executives were sued by investors and shareholders on Monday, reported Reuters. The two were accused of concealing how rising interest rates would leave its Silicon Valley Bank unit, which failed last week, "particularly susceptible" to a bank run.

The proposed action against SVB, Chief Executive Greg Becker and Chief Financial Officer Daniel Beck was filed in the federal court in San Jose, California. 

The filed case is the first in the series of likely lawasuites over the demise of Silicon Valley Bank. SVB had surprised the market two days earlier by disclosing a $1.8 billion after-tax loss from investment sales and that it planned to raise capital, as it scrambled to meet redemption requests.

14 Mar 2023, 08:14:33 AM IST

US Fed to probe its supervision of SVB, release review by May 1

The US Federal Reserve on Monday announced to launch an internal review of its supervision and regulation of Silicon Valley Bank after its collapse last week. The review will be release by May 1 and will be chaired by Vice Chair for Supervision Michael Barr. The collapse of the lender has sent global shockwaves in stock markets across the world. The bank was overseen by the San Francisco Fed and was the biggest bank failure in more than a decade.

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

14 Mar 2023, 07:59:15 AM IST

Company is open and conducting business as usual, says SVB CEO Tim Mayopoulos

Newly Appointed CEO of Silicon Valley Bank, Tim Mayopoulos, said the company is open and conducting business as usual, reported Reuters citing a SVB Financial Group letter.

He also stated that the company's business is normal within the US and is expected to resume cross-border transactions in coming days. He also added that all the depositors have full access to their money and new and existing deposits are also protected.

14 Mar 2023, 07:29:42 AM IST

Recent crisis shows one can lose money even as being a bank depositor, says Bill Ackman

The recent events of bank collapse and their ripple effect in the market and economy has made clear that people can loose money even as being a depositor, said American Investor Bill Ackman in his tweet on Monday.

In his tweet, he also drew out the attention towards the two tier deposit system established in the USA to secure depositors’ money kept in banks.

“In a world with @Twitter - speed spread of information and smart-phone-enabled bank accounts where withdrawals can be made with the push of a button, no bank is safe from a run unless the depositor has an explicit gov't guarantee that ensures that they always have complete access to the total value of their deposits," said Bill in his tweet.

14 Mar 2023, 07:18:34 AM IST

Asian share markets tumble as US banking crisis grip investors

Amid rising fear in US banking crisis, Asia share markets continue to slid during early trade on Tuesday. The downfall was led by Japan's financial stocks losses. The asian share market is tumbling as the US banking crisis gripped investors ahead of US inflation data release. The crisis widened with the fallout of Signature Bank. Investors continue to doubt the US government's hastily formed rescue plan. 

Heavy selling hit U.S. regional bank stocks and traders raced headlong from bets on U.S. rate hikes, reckoning the Fed would now be thinking twice. reported Reuters.

14 Mar 2023, 06:55:19 AM IST

Investors doubt US govt's bank-rescue plan as First Republic Shares Plummet

Amid the falling US bank stocks, investors are questioning the efficacy of the US government's hastily made rescue plan on weekend for the banking system to prevent more fallout from the collapse of SVB Financial Group's Silicon Valley Bank.

US bank stocks slid, including those of San Francisco-based First Republic Bank, which tried to reassure investors with a statement about the strength of its liquidity. The company’s shares plunged a record 62% in New York. Among other regional banks, Phoenix-based Western Alliance Bancorp slumped 47%, and Beverly Hills, California-based PacWest Bancorp slid 21%, reported Bloomberg.

Major lenders also took a hit. Wells Fargo & Co. was down 7.1%, Citigroup Inc. slipped 7.5% and Bank of America Corp. declined 5.8%. The KBW Bank Index dropped 12%, the steepest decline since March 2020. (Bloomberg)

14 Mar 2023, 06:30:11 AM IST

Sunrun has access to $80 million that had been with SVB, says CEO 

America's biggest rooftop solar company, Sunrun Inc., said it can tap its cash at Silicon Valley Bank. It also informed of its good access to capital despite solar investors' concerns about rising rates after the collapse of the startup lender. The company had access to the $80 million in deposits at the bank till yesterday. The company had $953 million in cash at the end of 2022.

“We have really good access to capital," Chief Executive Officer of Sunrun Mary Powell said in an interview Monday at Bloomberg’s bureau in San Francisco. 

14 Mar 2023, 06:18:27 AM IST

Oil trading continues to suffer due to SVB collapse ahead of inflation data

Oil held losses ahead of key inflation data as the biggest US bank collapse since 2008 continued to ripple through financial markets. West Texas Intermediate traded below $75 a barrel after closing 2.5% lower on Monday following a volatile session. Investors will be watching the consumer price index read due later Tuesday for clues on the path forward for monetary tightening, though bets are increasing the Federal Reserve won’t raise interest rates next week due to the fallout from the demise of Silicon Valley Bank. “Oil has been unable to escape the spill over from the collapse of SVB," said Warren Patterson, head of commodities strategy for ING Groep NV. “There is still plenty of room for further volatility in the short term with US CPI data." (Bloomberg)

14 Mar 2023, 05:55:36 AM IST

Collapsed Signature Bank's real-time crypto payments network still online, for now

Signature Bank's collapse is another casualty in the ongoing banking turmoil. The company's online payment network continues to be online even after the lender was put into receivership, reported Bloomberg. Signet, a blockchain-based system, has been a key piece of the infrastructure powering the 24/7 crypto market. The system, a competitor to Silvergate Capital Corp.’s now-defunct SEN, counted stablecoin issuer Circle, crypto exchange Coinbase and a range of crypto trading shops among its users. Signet used technology developed by Tassat, which builds private blockchains for banks. (Bloomberg)

14 Mar 2023, 05:34:15 AM IST

Apollo aims to buy SVB assets suitors circle $73.6 billion loan book

One of the largest alternative asset managers, Apollo Global Management Inc has expressed interest in snapping up a book of loans held by collapsed Silicon Valley Bank. Apollo is considering to buy pieces of the bank, reported Reuters. The bank had $73.6 billion of loans as of Dec. 31, 2022, but the size of the loan book Apollo is interested in couldn’t be determined. Apollo declined to comment.

The Federal Deposit Insurance Corp. took over Silicon Valley Bank on Friday, after its long-established customer base of tech startups began withdrawing deposits en masse.

At the end of last year, the bank had more than $175 billion in mostly uninsured deposits and $209 billion in total assets. Many of those assets were long-term bonds the bank had to sell at a loss due to rising interest rates.

14 Mar 2023, 01:42:42 AM IST

Fed vice chair Barr to lead review of SVB regulation

Federal Reserve Vice Chair Michael Barr will lead a review of the supervision and regulation of Silicon Valley Bank "in light of its failure," the central bank announced Monday.

"The events surrounding Silicon Valley Bank demand a thorough, transparent, and swift review by the Federal Reserve," said Fed Chair Jerome Powell, according to the statement. The review will be publicly released by May 1. (AFP)

14 Mar 2023, 01:40:33 AM IST

Credit risk surges as investors fear bank failures threaten markets

Credit risk indicators flashed red on Monday, as investors worried about contagion risks across corporate debt markets after the collapse of Silicon Valley Bank (SVB) and New York's Signature Bank in the space of 72 hours.

An index of credit default swaps (CDS) on U.S. investment-grade companies rose to 90.2 basis points, its highest since November, after U.S. action to guarantee deposits at tech-focused lender SVB failed to reassure investors that other banks remain financially sound.

The equivalent index for CDS on junk-rated companies fell in price to 98.8 on Monday, its lowest since November. In Europe, the cost of insuring exposure to European junk bonds on Monday posted its biggest jump in three months.

Rising CDS spreads signal investors are hedging bets on a deterioration in credit quality.

"Unfortunately these things tend to rarely be isolated," said Jordan Kahn, president and chief investment officer at ACM Funds in Los Angeles.

"This is a really ugly credit event that's happening and the Fed and the Treasury have come out to backstop it, but even if there is some relief period after this, (my concern is) that it will spread to other things," he said. "There are other types of credit events that are likely to unfold." (Reuters)

13 Mar 2023, 10:46:26 PM IST

European stocks log steepest one-day fall this year as banks extend slide

European stocks logged their steepest one-day fall this year on Monday on continued drag from banking stocks even as authorities stepped in to limit the fallout from the sudden collapse of Silicon Valley Bank. European banking stocks dropped 5.7%, notching their worst two-day selloff since the Russia-Ukraine war broke out early last year.

13 Mar 2023, 10:33:44 PM IST

Britain's banks are well capitalised, liquidity is strong, says UK PM Sunak

Britain has well capitalised banks, Prime Minister Rishi Sunak said on Monday, adding his voice to ministers and officials who say there is no concern about systemic risk following the collapse of Silicon Valley Bank.

"Our banks are well capitalised, the liquidity is strong," Sunak told ITV during a visit to the United States, reported Reuters

"I think the Bank of England Governor was right and the Chancellor was right to address this and make it clear that actually our banks are well capitalised and they don't have any concerns about systemic risk."

13 Mar 2023, 09:52:10 PM IST

US admin's stance on Silicon Valley Bank reassuring for Indian startups who have funds there: Nasscom SVP

Nasscom on Monday said the US administration's stance on protecting depositors of Silicon Valley Bank that collapsed, is "reassuring" for Indian startups who have funds in that bank.

The announcement by Biden administration's that depositors of Silicon Valley Bank (SVB) will have access to their money, has given hope, said Nasscom's Senior Vice President and chief strategy officer Sangeeta Gupta reported PTI.

It will address the immediate financial issues that Indian startups were grappling with, she added.

13 Mar 2023, 09:31:39 PM IST

First Republic able to meet withdrawal demands with JPMorgan funding

First Republic Bank has been able to meet withdrawal demands on Monday with the help of additional funding from JPMorgan Chase & Co, the mid-cap lender's Executive Chair Jim Herbert told CNBC.

The bank was not seeing massive outflow of deposits, Herbert said.

13 Mar 2023, 09:22:39 PM IST

Trading in several bank stocks halted

Exchanges just halted trading in several bank stocks due to volatility. The sector is once again selling off sharply in early trading Monday.

Currently halted stocks include - PacWest Bancorp, Zions Bancorporation, First Republic Bank, Regions Financial, reported WSJ

13 Mar 2023, 09:08:57 PM IST

Euro zone bank supervisors see limited hit from SVB collapse

Euro zone supervisors see limited consequences for banks in the region from the collapse of two U.S. lenders, while stressing the need to watch any further spillover closely.

Investors were selling euro zone bank shares and reeling in their bets on interest rate increases by the European Central Bank after Silicon Valley Bank became the largest U.S. bank to fail since the global financial crisis of 2008, prompting U.S. authorities to step in.

But a senior European Central Bank supervisor said euro zone banks were well funded and more conservative than SVB, which mostly lent to tech startups, and New York-based rival Signature Bank, which was wound down at the weekend, reported Reuters.

The source said supervisors saw no direct implication of the SVB collapse for euro zone banks but cautioned this could change if the fallout in the United States extended to bigger banks, raising the risk of contagion.

13 Mar 2023, 08:37:17 PM IST

Wall Street mixed as investors weigh possible rate hike pause, bank contagion risks

US stock indexes were mixed in choppy trading on Monday as investors weighed a possible pause in interest rate hikes by the Federal Reserve in March and risks of a contagion from Silicon Valley Bank's collapse.

Regulators over the weekend stepped in to restore investor confidence in the banking system, saying Silicon Valley Bank depositors will have access to their funds on Monday.

President Joe Biden said that the administration's swift actions to help depositors in two U.S. banks should give Americans confidence that the banking system is safe.

Trading in shares of SVB's peer Signature Bank, which was shut down by regulators on Sunday, was halted.

First Republic Bank dropped 76.6% as news of fresh financing failed to reassure investors, while Western Alliance Bancorp, PacWest Bancorp fell 82.5% and 53% respectively. Trading in the stocks was halted several times due to volatility.

Shares of big U.S. banks including JPMorgan Chase & Co , Morgan Stanley and Bank of America fell between 0.8% to 6%.

The KBW regional banking index fell 9.8%, while the S&P 500 banks index dropped 6.4%.

Dow Jones Industrial Average was up 28.10 points, or 0.09%, at 31,937.74, the S&P 500 was down 1.70 points, or 0.04%, at 3,859.89, and the Nasdaq Composite was up 26.58 points, or 0.24%, at 11,165.47.

13 Mar 2023, 08:20:56 PM IST

Crude oil prices slide $2 as banking fears rattle markets

Oil prices fell $2 in volatile trading on Monday as the collapse of Silicon Valley Bank hit equities markets and raised fears of a fresh financial crisis, but a recovery in Chinese demand provided support.
Brent crude futures were down $2.03, or 2.5%, to $80.75 per barrel by 1401 GMT. West Texas Intermediate U.S. crude futures (WTI) fell $2.11, or 2.8%, to $74.57 a barrel.

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