Credit Suisse banking crisis: US insists banking system is ‘healthy’ as Swiss lender’s shares rebound – at the latest

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

Eric Garcia has the whole story.

Wall Street’s main indices rebounded sharply on Thursday after news and then confirmation that some of the US’s largest financial institutions were coming to the rescue of First Republic Bank.

The banks have agreed to deposit $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 contribute about $2.5 billion, the banks said in a press release.

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

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

A group of financial institutions has agreed to deposit $30 billion in First Republic to show confidence in the US banking system, the banks announced Thursday afternoon.

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

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

Shares in the FTSE 100 regained some lost ground on Thursday after a yo-yo session that saw the index fluctuate by as much as 130 points between its high and low.

The rebound helped the index jump to 7,410 points by the end of the day, up 65.58 points, or 0.9%, after Swiss authorities agreed a £45 billion emergency loan with Credit Suisse overnight.

But it wasn’t nearly enough to erase Wednesday’s losses, when the FTSE had its worst single trading day in three years – since the early days of the Covid-19 pandemic.

Thomas Kingsley explains how the Swiss credit and investment bank got to its current position and whether we should be concerned.

Signature Bank’s collapse came surprisingly quickly, leaving the question of whether there was a fundamental flaw in the way it did business — or if it was just a victim of the panic that spread after the Silicon Valley bank collapse .

There were few outward signs that Signature Bank was collapsing before the New York Treasury Department on Sunday seized the bank’s assets and asked the Federal Deposit Insurance Corp to take over its operations. The FDIC will operate it as a signature bridge bank until it can be sold.

But in the run-up to the takeover, there were calls on social media to warn savers not to withdraw their money from the bank — and a real frenzy of withdrawals followed. There has not yet been a public account of how much money was withdrawn from the bank, which has historically been friendlier to the cryptocurrency industry than most in the US.

A group of financial institutions is in talks to inject $30 billion into First Republic in a show of confidence in the banking system, sources said CNBC’s David Faber.

The deal is still ongoing, the sources said, and the amounts are a moving target. The plan does not include an acquisition of First Republic.

Bank of America, Wells Fargo, Citigroup and JPMorgan Chase will each contribute around $5 billion, while Goldman Sachs and Morgan Stanley will contribute around $2.5 billion, the sources said. Truist, PNC, US Bancorp, M&T Bank and Capital One will each deposit about $1 billion.

As Wall Street is rocked by the rapid demise of Silicon Valley Bank — the biggest collapse of an American bank since the 2008 financial crisis — some social media users are focusing on a single culprit: their socially conscious or “woke” agenda.

But the Santa Clara-based institution’s declared commitment to Diversity, Equity and Inclusion (DEI) was not a reason for the bank’s collapse, banking and finance experts say. His poor investment strategies and a client base prone to devastating bank runs did.

Here’s a closer look at the facts.

Credit Suisse shares rallied on Thursday after receiving a lifeline from Switzerland’s central bank to boost investor confidence, but the rally lost ground against a feverish backdrop.

The Swiss bank’s announcement of a US$54 billion loan from the Swiss National Bank on Thursday helped stem sharp selling in financial markets and sparked a modest rally in European stocks.

Some market participants welcomed the news, others were cautious. Analysts at JP Morgan said the SNB’s loan would not be enough to allay investor concerns and that “the status quo is no longer an option”, leaving a Credit Suisse takeover as the most likely outcome.

The collapse of two regional US banks last week has prompted investors and bank customers to worry about the resilience of the financial system in the face of rising global interest rates.

For months, right-wing media workers and Republican elected officials have blamed an “awakened” agenda for the collapse of American institutions, from their schools and workplaces to the banks that make their businesses possible.

Silicon Valley Bank’s historic failure is likely the result of a variety of compound factors unrelated to so-called “alertness,” from cutbacks during the Donald Trump era to regulations introduced during the last financial crisis unsustainable bank focus on explosion of venture capital firms and tech startups becoming reality, rising interest rates and panic.

Yet Republican lawmakers have consistently returned to their all-encompassing scapegoat — using “woke” as an umbrella term for anything to do with diversity, progressive political platforms, LGBT+ inclusivity, anti-racism initiatives, or environmental activism — while pushing a statewide legislative agenda , to which they devote themselves exclusively to its destruction.