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

It’s been a case of lather, rinse, repeat in banking this week, with the collapse of Silicon Valley Bank followed by a much bigger crisis in the form of Credit Suisse.

The mid-sized SVB was more systemically important than many had assumed, raising big questions about US oversight.

But there was never any doubt about the risks from a wounded Credit Suisse, a pillar of the Swiss banking establishment and a (shaking) member of the front board.

Let’s start with the good that came out of the collapse of Silicon Valley Bank, which managed around a quarter of UK tech companies and was in danger of collapse.

The UK arm was saved by a deal struck at the weekend by the Bank of England, the government and HSBC – the bank picking up the pieces after “a competitive process” and (so we’re told) sparing the taxpayer a nasty wallop In the process of.

There is something comfortingly old-fashioned about the way it was mediated behind closed doors. The end result is that the business will be transferred to HSBC UK, meaning depositors will be able to get their money and tech workers their wages.

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

Markets remained steady on Thursday night amid hopes that the new lifelines would limit any “contagion” to other banks.

Thomas Kingsley and Alastair Jamieson take a look at 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, which resulted in a windfall of new deposits for larger institutions.

London’s top shares faced a torrid session on Thursday, with investors sending the FTSE 100 up and down throughout the day, but despite choppy trading it managed to close higher.

Coming off the index’s worst day in three years on Wednesday amid concerns over the future of banking giant Credit Suisse, trading on Thursday was extremely volatile.

The top index initially gained ground, looking for a recovery as trade opened after Swiss authorities provided a £45bn emergency loan to the bank under stress.

But during the day it was hit like a yo-yo, at one point even plunging into negative territory. At the end of the day it had risen 0.9%.

It’s been a case of lather, rinse, repeat in banking this week, with the collapse of Silicon Valley Bank followed by a much bigger crisis in the form of Credit Suisse.

The mid-sized SVB was more systemically important than many had assumed, raising big questions about US oversight.

But there was never any doubt about the risks from a wounded Credit Suisse, a pillar of the Swiss banking establishment and a (shaky) member of the front board.

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

Eric Garcia has the full story.

Wall Street’s main indexes rallied sharply on Thursday after news and then confirmation that some of the largest U.S. financial institutions were coming to the aid of First Republic Bank.

Banks agreed to deposit $30 billion into First Republic Bank to demonstrate their confidence in the US banking system.

Bank of America, Wells Fargo, Citigroup and JPMorgan Chase will contribute about $5 billion each, while Goldman Sachs and Morgan Stanley will put up 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 put up about $1 billion.

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

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

Bank of America, Wells Fargo, Citigroup and JPMorgan Chase will contribute about $5 billion each, while Goldman Sachs and Morgan Stanley will put up 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 put up about $1 billion.