Shares of banks in the United States saw significant declines on Monday despite announcements from regulators that deposits with failed lenders Silicon Valley Bank (SVB) and Signature Bank will be protected. Shares of regional lender First Republic Bank fell the most, falling more than 60% on Monday, representing the biggest share loss.
At the time of this report’s filing, shares of the California bank had fallen more than 65% to around $28. Other banks and financial services companies also saw their prices collapse: Western Alliance Bancorp by 64% to $18, KeyCorp by 37% to 11% and PacWest Bankcorp by 30% to $7.
Source: MSN Money.
Other lenders follow as well: Zions Bancorporation from 25% to $30, Charles Schwab from 11% to $52 and Bank of America from 3% to $29, among others. Many of these stocks were halted multiple times throughout the day due to volatility.
Additionally, the price crash is occurring despite the fact that the Federal Reserve has launched a new bank term funding program to provide loans of up to one year to banks in exchange for high-quality collateral like bonds. of the Treasury.
However, First Republic Bank says it remains strong. Jim Herbert, the bank’s executive chairman, said CNBC Monday that the lender was operating as usual. The bank announced on Sunday that it had received additional funding from the Federal Reserve and JPMorgan, bringing the bank’s reserve liquidity to about $70 billion.
Today we announced a further strengthening and diversification of our liquidity position. This increase in available liquidity further strengthens the security and stability of First Republic. We are grateful to our customers for their continued support. https://t.co/eucaVOEjoy
— First Republic (@firstrepublic) March 13, 2023
The plunge in U.S. bank stocks comes days after SVB, a lender to tech companies, collapsed over its inability to meet customer withdrawal needs. The withdrawal frenzy among investors had been spurred by rising interest rates since last year.
To meet the needs, SVB sold its bond portfolio consisting mainly of US Treasuries last Wednesday with a loss of $1.8 billion. The company also announced on Thursday that it intends to offer its investors common stock and convertible preferred stock worth $2.25 billion. However, on Friday, the Federal Deposit Insurance Corporation admitted the SVB into receivership. The UK branch of the bank was also sold to HSBC for £1.
To avoid contagion, New York regulators closed Signature, a full-service bank, on Sunday in an attempt to “protect depositors.” However, cryptocurrency exchange, Coinbase, and stablecoin issuer Paxos later revealed their massive exposure to Signature Bank.
Additionally, the Federal Reserve launched the Bank Term Funding Program on Sunday, which is a $25 billion funding program to help institutions such as commercial banks meet their emergency liquidity needs.
Shares of banks in the United States saw significant declines on Monday despite announcements from regulators that deposits with failed lenders Silicon Valley Bank (SVB) and Signature Bank will be protected. Shares of regional lender First Republic Bank fell the most, falling more than 60% on Monday, representing the biggest share loss.
At the time of this report’s filing, shares of the California bank had fallen more than 65% to around $28. Other banks and financial services companies also saw their prices collapse: Western Alliance Bancorp by 64% to $18, KeyCorp by 37% to 11% and PacWest Bankcorp by 30% to $7.
Source: MSN Money.
Other lenders follow as well: Zions Bancorporation from 25% to $30, Charles Schwab from 11% to $52 and Bank of America from 3% to $29, among others. Many of these stocks were halted multiple times throughout the day due to volatility.
Additionally, the price crash is occurring despite the fact that the Federal Reserve has launched a new bank term funding program to provide loans of up to one year to banks in exchange for high-quality collateral like bonds. of the Treasury.
However, First Republic Bank says it remains strong. Jim Herbert, the bank’s executive chairman, said CNBC Monday that the lender was operating as usual. The bank announced on Sunday that it had received additional funding from the Federal Reserve and JPMorgan, bringing the bank’s reserve liquidity to about $70 billion.
Today we announced a further strengthening and diversification of our liquidity position. This increase in available liquidity further strengthens the security and stability of First Republic. We are grateful to our customers for their continued support. https://t.co/eucaVOEjoy
— First Republic (@firstrepublic) March 13, 2023
The plunge in U.S. bank stocks comes days after SVB, a lender to tech companies, collapsed over its inability to meet customer withdrawal needs. The withdrawal frenzy among investors had been spurred by rising interest rates since last year.
To meet the needs, SVB sold its bond portfolio consisting mainly of US Treasuries last Wednesday with a loss of $1.8 billion. The company also announced on Thursday that it intends to offer its investors common stock and convertible preferred stock worth $2.25 billion. However, on Friday, the Federal Deposit Insurance Corporation admitted the SVB into receivership. The UK branch of the bank was also sold to HSBC for £1.
To avoid contagion, New York regulators closed Signature, a full-service bank, on Sunday in an attempt to “protect depositors.” However, cryptocurrency exchange, Coinbase, and stablecoin issuer Paxos later revealed their massive exposure to Signature Bank.
Additionally, the Federal Reserve launched the Bank Term Funding Program on Sunday, which is a $25 billion funding program to help institutions such as commercial banks meet their emergency liquidity needs.
