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China's state media says the banking crisis happened due to poor financial regulation and US domestic politics. But banks in China also have their own issues amid the country's property woes. China's heavy-handed criticism comes at a bleak time for its own banksBut this harsh criticism comes at a bleak time for China's own banks. Since its collapse, some of these start-ups have been looking for alternatives — such as bigger US banks or other Chinese lenders, Reuters reported. Despite these troubles, China touts its governance system as being superior to "Western democracy" and uses state media to push its messaging.
Money market funds drew in the most cash since early 2020 as depositors sought safety during a shakeup in the banking industry. About $121 billion was poured in money market funds over the past week, the Investment Company Institute said. Last week's shutdown of Silicon Valley Bank was the first bank seizure since 2008. For the week that ended on Wednesday, $120.93 billion flew into money market funds, the Investment Company Institute said Friday. The push of cash into money market funds resulted in a record $5.01 trillion in total assets tracked by ICI.
Banking chaos is weighing on oil prices, as crude benchmarks hit their lowest levels since December 2021. Fed policy and US and European bank turmoil have darkened the global economic outlook in the last week. A week ago, the US benchmark was nearly 12% higher, and global crude traded about 11% higher. On Friday, regulators shut down Silicon Valley Bank, and two days later did the same to Signature Bank. "That, and lower oil prices/interest rates may soften the economic blow of tighter lending standards."
JPMorgan Asset Management's CIO predicts more pain ahead for the banking sector and the economy. Turmoil at Credit Suisse is just the "tip of the iceberg," JPMorgan's Bob Michele told Bloomberg. I think this is the tip of the iceberg," Bob Michele said on Bloomberg TV Wednesday. Credit Suisse shares shed as much as 30% on Wednesday as waning investor confidence in the bank ws sparked by one of the bank's largest shareholders stating that it would not lend any further financial support. Shares of Credit Suisse endured their largest single-day selloff Wednesday.
Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailCollapse of U.S. banks: There is one 'common theme,' says investment advisory firmRam Ahluwalia of Lumida Wealth discusses the collapse of Silicon Valley Bank, Signature Bank and Silvergate Bank.
Galaxy Digital CEO said that the US is heading for a credit crunch and economic downturn. "[T]he commodity market is telling you, the oil market is telling you we're heading into a recession." "The commodity market is telling you, the oil market is telling you we're heading into a recession." Gold, meanwhile, rallied 1.37% Wednesday to about $1,937.50, and Brent crude oil, the international oil benchmark, tumbled 5.6% to trade around $73 a barrel. "And so you're going to see a credit crunch happening in the United States and that's starting to get priced into the market in a dramatic way."
[1/5] Guo Wengui (also known as Miles Kwok) holds a news conference with Steve Bannon in New York, New York, U.S., November 20, 2018. Guo, 52, was charged with 11 criminal counts including securities fraud, wire fraud and concealment of money laundering, after "lining his pockets with the money he stole," U.S. Attorney Damian Williams in Manhattan said in a statement. They will propose a "robust bail package," according to Tamara Giwa, a federal public defender who represented Guo at Wednesday's hearing. Bannon is not accused of wrongdoing in Guo's criminal case. It said it also seized assets purchased with proceeds from Guo's alleged fraud, including a Lamborghini Aventador, and wants Guo to forfeit the yacht.
Bitcoin jumped as much as 9.6% to $26,533, its highest since June 2022, in its fourth straight days of gains. Major cryptocurrencies have been buoyed in recent days by U.S. authorities announcing plans to limit the fallout from the collapse of Silicon Valley Bank (SVB). U.S. authorities' action helped stabilise the major USDC stablecoin, whose issuer Circle had deposits of $3.3 billion at SVB. The widely anticipated reading may lead the Federal Reserve to slow or even pause hiking interest rates next week. Reporting by Elizabeth Howcroft and Tom Wilson, editing by Sinead Cruise and Susan FentonOur Standards: The Thomson Reuters Trust Principles.
In a harsh blow to an already-reeling sector, Moody's Investors Service on Monday cut its view on the entire banking system to negative from stable. "We have changed to negative from stable our outlook on the US banking system to reflect the rapid deterioration in the operating environment following deposit runs at Silicon Valley Bank (SVB), Silvergate Bank, and Signature Bank (SNY) and the failures of SVB and SNY," Moody's said in a report. But it said other institutions with unrealized losses or uninsured depositors still could be at risk. Moody's on Monday downgraded Signature Bank and said it would remove all ratings. SVB, for instance, found itself with some $16 billion in unrealized losses from long-dated Treasurys it held.
The collapse of three crypto-friendly banks is a boon for stablecoin issuer Circle, investors said. Slivergate Bank, Silicon Valley Bank, and Signature all imploded in the space of a week. Circle keeps its reserves at BNY Mellon, which helped its stablecoin USDC recover after SVB's fall. Circle, the company behind the stablecoin USDC, is set to come ahead in the aftermath of the collapses of Silvergate Bank, Silicon Valley Bank, and Signature Bank, according to several investors and founders. One risk, however, is that recent bank failures prompt regulators to bar crypto companies, including Circle, from accessing the US banking system altogether.
NEW YORK, March 14 (Reuters) - U.S. consumers have flooded banking giants, including JPMorgan Chase & Co (JPM.N), Bank of America Corp (BAC.N) and Citigroup Inc (C.N) with deposits after the collapse of Silicon Valley Bank, sources familiar with the matter said. Large banks saw in influx of money from consumers and businesses in the last week as SVB teetered, one of the sources told Reuters. Rating agency Moody's Investors Service on Tuesday changed its outlook on the U.S. banking system to negative from stable to reflect the rapid deterioration in the operating environment following deposit runs at Silicon Valley Bank, Silvergate Bank, and Signature Bank. Shares of U.S. regional banks such as First Republic Bank (FRC.N), Western Alliance Bancorp (WAL.N) and KeyCorp (KEY.N) have slumped on fears of possible bank contagion following the collapse of SVB and Signature Bank (SBNY.O). For example shares of First Republic climbed nearly 40 percent after plunging more than 60% on Monday.
Moody's downgraded its outlook on the entire US banking system on Tuesday. The revised rating reflects the environment that sparked bank runs at Silicon Valley Bank, Signature Bank, and Silvergate Bank. "Our base case is for the Fed's monetary tightening to continue, which could deepen some banks' challenges." "Our base case is for the Fed's monetary tightening to continue, which could deepen some banks' challenges. Moody's median rating on US banks is now a3, or three notches higher than the global median of baa3.
The worst isn't over, and regional banks are still vulnerable, CNBC's Jim Cramer said Monday, after a bruising few days that saw Silicon Valley Bank , Signature Bank , and Silvergate Bank all shutter. It isn't a boon for big banks, though, with what Cramer called an "alert" Federal Reserve keeping an eye out for smaller regional banks losing out to J.P. Morgan 's gain. "Part of that's because the Fed expressed a commitment to keeping as many regional banks in business as they can. Now, we don't want to be like other countries where only a few major banks control the entire market," Cramer said. That is what's driving the Fed's desire to support regional banks with favorable lending, and what propelled federal regulators to backstop deposits.
The Signature Bank headquarters at 565 Fifth Avenue in New York, US, on Sunday, March 12, 2023. On Friday, Signature Bank customers spooked by the sudden collapse of Silicon Valley Bank withdrew more than $10 billion in deposits, a board member told CNBC. That run on deposits quickly led to the third-largest bank failure in U.S. history. Signature had 40 branches, assets of $110.36 billion and deposits of $88.59 billion at the end of 2022, according to a regulatory filing. Venture capital investors and founders drained their Silicon Valley Bank accounts Thursday, leading to its seizure by midday Friday.
The days before the industry had crypto-forward banks to turn to were some of the darkest for the industry. At the end of February, three major banking regulators issued a joint statement warning banks of the liquidity risks associated with banking crypto companies. "Banks and law firms are getting a clear message from regulators: distance yourselves from crypto companies," said Ric Edelman, founder of the Digital Assets Council of Financial Professionals. "But for the moment, crypto companies are increasingly finding themselves where cannabis companies were a decade ago." Employees work at a Signature Bank branch in Manhattan on March 13, 2023 in New York City.
As the fallout from Silicon Valley Bank 's failure continues to unfold, the Federal Reserve needs to slow down before "a lot more stuff" breaks, Altimeter Capital's Brad Gerstner told CNBC's Halftime Report Monday. "By Thursday, it was very clear that our entire regional banking system was in trouble." Their profile was far different from most regional banks, which focus on small businesses or individual consumers. "We are at the verge of one of the most interesting periods of technological innovation," Gerstner told CNBC's Scott Wapner, before comparing the current moment to the 2008 financial crisis. "That's the market telling the Fed that 'you better slow down, otherwise a lot more stuff is going to break.'"
Crypto-focused Silvergate , which announced its plans to liquidate this week, is suffering from woes similar to that of failed Silicon Valley Bank . That is, Silvergate's distress is linked to rising interest rates – rather than the whims of digital assets. There is also an impact from the rising interest rate environment banks now find themselves in. "As the bank of choice for crypto, Silvergate Bank's failure is disappointing, but predictable," she tweeted Wednesday afternoon . Now, customers must be made whole [and] regulators should step up against crypto risk."
Venture capital firms on both sides of the Atlantic have been urging their portfolio companies to move money out of embattled lender Silicon Valley Bank, deepening fears of a run on the tech-focused bank. Silicon Valley Bank shares plunged 60% Thursday after disclosing that it needed to shore up its capital with a $2.25 billion equity raise from investors including General Atlantic. Pear VC, an early-stage VC firm based in San Francisco, urged its portfolio network to withdraw funds from SVB on Thursday. The wind-down of crypto-centric Silvergate Bank and pressure on Silicon Valley Bank this week reminded some founders of the 2008 financial crisis, in which banks toppled during the mortgage bust. We are seeing other funds encouraging companies to withdraw their funds from SVB.
NEW YORK, March 10 (Reuters Breakingviews) - Nearly three years with no U.S. bank failures just came to an unseemly end. The bank owned by SVB Financial (SIVB.O) relied more heavily on large, and therefore, uninsured, deposits than other banks. A buyer – say, a bank that covets SVB’s relationship with upwardly mobile entrepreneurs – might swoop in and buy the whole thing. Other depositors would receive certificates of receivership, which entitle them to dividends payable from the proceeds of selling the bank’s assets. SVB had around $165 billion in deposits as of Feb. 28, it said in a presentation on March 8.
Cratering Silicon Valley Bank's troubles could be the first sign of a new financial crisis. While some say the US banking system is solid, others think this could be the first sign of a new financial crisis. Well, and highlighting the current economic/financial/policy fluidity, we have something: banking system worries," El-Erian said on Twitter. Silicon Valley Bank going under would be exponentially worse. Activist Investor Ryan Cohen"Does this mean I don't have to pay back Silicon Valley Bank?"
Greenoaks Capital Partners warned its startups about Silicon Valley Bank in November, Bloomberg said. More than a dozen Greenoaks startups withdrew an estimated $1 billion from SVB over recent months, according to Bloomberg. Shares of SVB have plunged more than 86% over two days as other VCs urged their startups to pull deposits from the bank. Mehta, whose firm has $15 billion under management, also said in November that First Republic Bank faced a similar risk. Silicon Valley Bank going under would be exponentially worse.
Keep an eye on banks, economic data, Jim Cramer says
  + stars: | 2023-03-09 | by ( Rohan Goswami | ) www.cnbc.com   time to read: +1 min
Frothy markets and banking tumult cast a pallor over the broader markets, but investors should keep an eye on economic data and the Federal Reserve's continued rate hikes, CNBC's Jim Cramer said on Thursday. Sharp declines in Silvergate Bank and SVB Financial shares came as the broader banking sector underwent a major collapse, Cramer said. Cramer pinned the collapse on a victory from the Fed and a general flight from three different spaces: commercial real estate, venture slowdown and crypto. A flurry of downgrades prompted concern about a couple of big commercial real estate names, Cramer said, including SL Green and Vornado Realty Trust . Cooling and weaker numbers for those reports, respectively, could be a boon for financials and for tech stocks, Cramer said.
With the demise of Silvergate Bank, investors should turn their attention to New York-based Signature Bank ( SBNY ), which has a big opportunity to pick up business from the crypto market, according to Wells Fargo. Late Wednesday, Silvergate Capital said it would shut down Silvergate Bank, which had become the go-to bank for crypto businesses in the past few years as larger banks steered clear. Businesses still have Signature Bank, however. "Signature [is the] last game in crypto-town," said Wells Fargo equity analyst Jared Shaw, adding, "It's the only larger bank remaining with a functional on-ramp for institutional crypto investors. Wells Fargo has an overweight rating on Signature with a $185 price target, implying almost 95% upside from where shares traded Thursday afternoon.
Bitcoin and other crypto assets fell Thursday following a decision by Silvergate Bank's to liquidate. Coinbase, Signature Bank, and Metropolitan Bank Co. shares were also lower. The company said Wednesday an "orderly wind down" and a voluntary liquidation of its Silvergate Bank was the best path forward in light of industry and regulatory developments. Signature Bank lost 8.6% and Metropolitan Bank Holding moved 5.6% lower. Metropolitan Bank in January said it would exit its services related to crypto assets following a review of developments in the industry.
Check out the companies making headlines before the opening bell:Etsy — Shares fell more than 6% in premarket after Jefferies double-downgraded the online marketplace to underperform from buy. Silvergate Capital — Shares of the crypto lender tumbled 50% after the company announced it will wind down operations and liquidate Silvergate Bank. Uber — Shares of the ride-hailing company rose about 2% in premarket trading following a Bloomberg report that Uber is considering spinning off its freight logistics division. SVB Financial — The financial services company's stock dropped 30% after the firm announced that it intends to offer $1.25 billion of its common stock and $500 million of depositary shares. LoanDepot — The mortgage lender's shares shed over 10% after its fourth-quarter earnings report missed analysts' expectations.
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