Biden Promises 'whatever needed' for U.S. Bank System as SVB Shock Hammers Stocks  

 

• Bank stocks around the world plunged on Monday even as President Joe Biden vowed to take whatever action was needed to ensure the safety of the U.S. banking system after the sudden collapse of Silicon Valley Bank (SIVB.O) and Signature Bank (SBNY.O).
• Biden's efforts to reassure markets and depositors came after emergency measures by the United States to guarantee deposits at both banks failed to dispel investor worries about potential contagion to other lenders worldwide. Major U.S. banks lost more than $70 billion in stock market value on Monday, bringing their total loss over the past three days to about $170 billion.
• SVB's customers will have access to all their deposits from Monday and regulators set up a new facility to give banks access to emergency funds that the Federal Reserve made it easier for banks to borrow from it in emergencies.
• SVB Financial Group (SIVB.O) and two top executives were sued on Monday by shareholders, who accused them of concealing how rising interest rates would leave its Silicon Valley Bank unit "particularly susceptible" to a bank run. The proposed class action against SVB, Chief Executive Greg Becker, and Chief Financial Officer Daniel Beck was filed in the San Jose, California, federal court.
• A furious race to re-price interest rate expectations also sent waves through markets as investors bet the Fed will be reluctant to hike next week. Traders currently see a 50% chance of no rate hike at that meeting, with rate cuts priced in for the second half of the year. Early last week a 25 basis point hike was fully priced in, with a 70% chance seen of 50 basis points.

(Source: Reuters)