The US government takes the field and announces a plan to prevent the failure of Silicon Valley Bank (SVB) from turning into a new Lehman Brothers, but the authorities close a second bank, the Signature Bank. The Treasury, the FDIC and the Fed announce that all deposits at the SVB will be available on Monday. In addition, the central bank is making available a new liquidity window to help banks respond to customer requests in the event of a flight. Meanwhile, the closure of Signature Bank, a major institution for crypto companies, marks the second major bank failure in three days and the third largest in history after Washington Mutual in 2008 and Svb
Biden, Svb intervention will not be paid by taxpayers
“There will be no losses for taxpayers, and that’s important. Let me repeat, there will be no losses incurred by taxpayers.” Thus President Joe Biden, in today’s speech at the White House, underlined that the Silicon Valley Bank (Svb) will not receive a government ‘bailout’, “but the funds will come from the shares paid by the banks to the Deposit Insurance Fund”. Janet Yellen, head of the Treasury department, already yesterday, in announcing that from today the account holders of Svb will be able to have access to their funds, had ruled out a bailout intervention for the bank’s owners and investors, underlining “we will never do again” what made for the financial crisis of 2008. In this case “investor protections” will not be triggered and the entire management of the SVB will be wiped out. “If the bank is directed by the Fdic – she added referring to the Federal Deposit Insurance Corporation – the people who ran the bank can no longer work there”.
Precipitano First Republic e Western Alliance
US regional banks under pressure on Wall Street with bankruptcy of Svb. First Republic loses 67%, Pacwest Bancorp 35.47% while Western Alliance 67.39%. Charles Schwab is also heavy, falling back by 17%.
2-year Treasury yield below 4%, biggest decline since 1987
The yield on two-year US Treasuries is posting the largest decline since the session following Black Monday in 1987 on fears about the fallout from the Silicon Valley Bank failure. Yield fell below the 4% threshold, down nearly 0.6 percentage points from Friday’s close, according to data from Refitiv. The decline in Treasuries is linked on the one hand to investors’ desire to reduce their exposure to the markets and on the other to the calculation that the Fed could now put a brake, at least temporarily, on its tightening maneuver on the cost of money. According to Goldman Sachs analysts, the Fed will remain firm in its next meeting on March 22 while previously expecting a 25 basis point hike.
Biden: stricter rules are needed for banks
“No losses will be borne by the taxpayers.” This was stated by Joe Biden regarding the “rapid” measures taken by the administration for the bankruptcy of Svb. “Americans can rest assured: their deposits are safe,” he added. Joe Biden intends to ask Congress and regulators to tighten the rules for banks. The president himself says so.
The markets point to the stop of the central banks, the rates of short-term bonds collapse
Government bond yields are collapsing around the world, with investors betting on a turn in the restrictive monetary policy of central banks in order to defuse the risks of contagion linked to the failure of Silicon Valley Bank. The most important tears are recorded on the two-year government bonds of the Eurozone, with the yield of the German Bund falling by 44 basis points and that of the French Oat by 46 while for the BTP the drop is ‘limited’ to 29 points . Traders see the ECB’s terminal rate ‘collapse’ to 3.56%. The effects can also be seen on the euro which reduces the rise against the dollar to 0.25%, with which it exchanges at 1.067.
Le Maire: “I don’t see any contagion risks for French banks”
The bankruptcy of the two US banks between Friday and Sunday, Svb Bank and Signature Bank does not put the sector in France at risk. Transalpine Economy Minister Bruno Le Maire assures this in an interview with ‘Franceinfo’. “«I don’t see any risk of contagion so there is no specific alert», said the government official. In France “we have solid banks and a high liquidity ratio”. Le Maire also referred to the “diversification” of the business sectors of transalpine banks.
Svb in Forbes best banks list just 5 days ago
Just five days ago, Svb published a tweet in which it proudly claimed to have been included in Forbes’ annual ranking of the best American banks. A “news” sadly surpassed by the news.
The CEO of Svb in the crosshairs: on February 27 he sold securities for $3.6 million
First controversies on the top management of Svb. The target is Chief Executive Greg Becker, whose trust sold $3.6 million worth of stock on Feb. 27, according to Sec. documents. Becker is now under scrutiny, including by an acquaintance of his, the California Democrat Ro Khanna, who on Sunday said Becker should pay back that money. “All that money should be returned,” Khanna told the Washington Post in an interview.
Crypto, Bitcoin and Ethereum up 10%. Circle: «Regular Operations»
Bitcoin, which returns above $22,000, and the other main cryptocurrencies are traveling at a rapid pace after the rescue of Silicon Valley Bank (Svb), which is also strongly linked to cryptocurrencies. Another bank, New York’s Signature Bank, also went bankrupt over the weekend. Thus bitcoin rises by 10.32% to 22,471 dollars, ethereum grows by 10.3% to 1,610 dollars, Bnb by 10.1% to 303.9 dollars. Among other things, Circle, a company active in the digital currency sector and in particular stablecoins, has reassured investors of the stability of its activities. “Circle’s operations are continuing smoothly, including its most recent settlement operations through our new partnership with Cross River Bank,” said CEO Jeremy Allaire.
Svb UK subsidiary sold to HSBC
The British branch of Silicon Valley Bank UK (for which the Bank of England has filed for insolvency after the crack) has been sold to HSBC: the British government has announced it. HSBC Holdings plc is one of the largest banking groups in the world. It is the first European credit institution by capitalization, its headquarters are located in the HSBC Tower in London’s Docklands.
TO FIND OUT MORE / The flash rescue of the English branch: HSBC takes over for 1 pound
Tokyo pays for Wall Street’s Black Friday
The Tokyo Stock Exchange ends the first session of the week in sustained decline, following the correction of the US stock market which collapsed on Friday after the bankruptcy declaration of the US Silicon Valley Bank last week. The reference index Nikkei marks a loss of 1.11%, at 27,832.96, dropping 311 points. On the foreign exchange market, the yen appreciates against the dollar at a level of 134.50, and against the euro at 143.80.
Fed, for Goldman no hike in March after the chaos Svb
Goldman Sachs economists no longer expect any interest rate hikes from the Fed in March following the stress on the banking system, which emerged with the SVB. Goldman expects considerable uncertainty surrounding the Fed’s next moves after March. This was reported by the Bloomberg agency. The investment bank had previously forecast a 0.25% rate hike in March.
Crypto, Binance reassures: «All funds are safe»
Binance, the largest cryptocurrency exchange platform, reassures after the collapse of Silicon Valley Bank. “In light of recent developments in the US banking system, we want to tell our community that all consumers’ funds are safe and accessible. Our business continues as usual,” says Binance. Rimblaza Bitcoin, which revises the 22 thousand dollars.
Biden: «Delighted with the quick fix»
“I am pleased that a quick fix has been found that protects American workers and small businesses, and keeps our financial system safe. A solution that also ensures that taxpayers’ money is not put at risk. This was stated by Joe Biden in a note commenting on the action of the American authorities for Silicon Valley Bank
State parachute on the bank, save all deposits
The US government takes the field and announces a plan to prevent the failure of Silicon Valley Bank from turning into a new Lehman Brothers. The Treasury, the FDIC and the Fed announce – in a joint statement – that all deposits with SVB will be available from Monday, including those above $250,000 insured by the Federal Deposit Insurance Corp.
View on ilsole24ore.com
