First Republic Bank: Wall St pledges billions to rescue California lender as Credit Suisse climbs liquidity line – latest

This week there was a banking bubble, rinse, repeat, with the collapse of a Silicon Valley bank followed by a much bigger crisis in the form of Credit Suisse.

The medium-sized SVB was more systemically important than many thought, raising big questions about US oversight.

But the dangers of Credit Suisse, a pillar of the Swiss banking establishment and a (trembling) member of the top table, have never been in doubt.

Let’s start with the good that came out of the collapse of the Silicon Valley bank that controls a quarter of the companies in the UK’s tech sector and threatens to collapse.

Britain’s hand was saved at the weekend by a joint deal between the Bank of England, the government and HSBC – a bank that picked up the pieces after a “competitive process” and (so we’re told) spared the taxpayer. nasty wallop in the process.

There’s an old-school comfort in being a broker behind closed doors. As a result, the business will be transferred to the UK bank HSBC, which means that depositors will receive their money and technical staff will receive their salaries.

The Santa Clara, Calif.-based tech and startup-focused lender was seized by regulators Friday in a run on deposits, making it the second-largest bank failure in U.S. history.

Markets were stabilizing on Thursday night on hopes that the new lifelines would limit any “contagion” to other banks.

Thomas Kingsley and Alastair Jamieson see what’s going on.

The collapse of Silicon Valley Bank and Signature Bank sent some customers rushing to pull their money out of smaller banks, leading to a sharp drop in new deposits for larger institutions.

London’s top stocks faced a roller-coaster session on Thursday as traders sent the FTSE 100 up and down throughout the day, but it managed to close higher despite turbulent trading.

Trading on Thursday was highly volatile, with the index coming off its worst day in three years on Wednesday amid concerns over the future of banking giant Credit Suisse.

The top-tier index initially gained strength as trade opened after Swiss authorities provided a £45 billion emergency loan to a stressed bank.

But throughout the day it bounced like a yo-yo, at one point even slipping into negative territory. By the end of the day, it increased by 0.9%.

This week there was a banking bubble, rinse, repeat, with the collapse of a Silicon Valley bank followed by a much bigger crisis in the form of Credit Suisse.

The medium-sized SVB was more systemically important than many thought, raising big questions about US oversight.

But the dangers of Credit Suisse, a pillar of the Swiss banking establishment and a (trembling) member of the top table, have never been in doubt.

The Massachusetts Democrat and longtime critic of the financial industry made the announcement during a Senate Finance Committee hearing with Treasury Secretary Janet Yellen.

Eric Garcia has a full story.

Wall Street’s major indexes rose sharply on Thursday after the news and confirmation that some of the largest U.S. financial institutions would come to the rescue of First Republic Bank.

Banks agreed to invest $30 billion in First Republic Bank to show confidence in the US banking system.

Bank of America, Wells Fargo, Citigroup and JPMorgan Chase will each contribute about $5 billion, while Goldman Sachs and Morgan Stanley will deposit about $2.5 billion, the banks said in a press release.

Truist, PNC, US Bancorp, State Street and Bank of New York Mellon each deposit about $1 billion.

The Dow Jones Industrial Average rose 371.98 points, or 1.17%, to 32,246.55. The S&P 500 added 1.76% to close at 3,960.34. The Nasdaq Composite rose 2.48% to 11,717.28.

On Thursday afternoon, a group of financial institutions agreed to invest $30 billion in First Republic in a show of confidence in the US banking system.

Bank of America, Wells Fargo, Citigroup and JPMorgan Chase will each contribute about $5 billion, while Goldman Sachs and Morgan Stanley will deposit about $2.5 billion, the banks said in a press release.

Truist, PNC, US Bancorp, State Street and Bank of New York Mellon each deposit about $1 billion.