Banking sector drama drags on with SVB, Credit Suisse in the air

Illustration: Gabriella Turrisi/Axios

The banking sector is about to enter a third week of existential questions and massive volatility, despite official efforts to stabilize markets and reassure depositors.

In the meantime, the search for causes, lessons and guilt is already in full swing.

What we look at: The fate of Silicon Valley Bank, whose financial fault lines caused the recent banking earthquake, still hangs in the air.

  • The former parent company filed for bankruptcy protection on Friday. The commercial bank – which was acquired by the US government last week – is not involved in that process.
  • A second attempt to sell the bank, now owned by the FDIC, is underway after the regulator failed to find a buyer last weekend.

Individual, At the urging of the Swiss National Bank and the country’s financial regulator, UBS is said to be exploring a deal for controversial rival Credit Suisse, the FT reports.

  • A separate report from the publication said BlackRock was evaluating options for a rival bid, which the US company denied.
  • Credit Suisse failed to find a bottom for its shares on Friday, two days after it secured its own $50 billion lifeline from the Swiss National Bank. The stock fell another 8% in Europe on Friday.

And First Republic Bank investors run…again. Shares were buoyed on Thursday by news of a $30 billion lifeline. But hours later, it announced it was suspending its dividend. The stock cratered another 32% on Friday.

Chasing causes, President Biden targeted executives on Friday and called on Congress to enact tougher penalties for those overseeing failing banks, writes Axios’ Kate Marino.

  • Meanwhile, the Fed said Monday it plans to investigate whether there were any potential regulatory or supervisory missteps that led to SVB’s collapse, Axios’ Courtenay Brown writes. The broad review of the bank’s bankruptcy is expected on May 1.

Editor’s Note: This story has been updated with additional information about Credit Suisse





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