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☆ On the precipice: How Credit Suisse's day of drama unfolded
▼ + stars: | 2023-03-16 | by ( ) www.reuters.com time to read: +5 min

Fifteen years later, Credit Suisse Group AG found itself on a similar precipice. By the time traders in New York were switching on screens on Wednesday, Credit Suisse had lost more than a fifth of its value. Credit Suisse did not comment for this story but noted recent interviews given by its CEO saying the bank was strong. STILL SMOLDERINGMarkets seemed to calm, but the fresh drama around Credit Suisse jogged memories that the financial system was not out of the woods yet. "We welcome the statement of support," Credit Suisse said.

☆ 'Big Short' investor Steve Eisman says it'll be bad news for stocks if the banking crisis causes the Fed to pause: 'You should be scared'
▼ + stars: | 2023-03-16 | by ( George Glover | ) www.businessinsider.com time to read: +3 min

Investors should be worried if the Federal Reserve doesn't raise interest rates next week, according to Steve Eisman. "If the Fed is scared, you should be scared," the "Big Short" investor told CNBC. Traders upped their bets on a Fed pause after the US's regional banking crisis rocked markets. "If the Fed doesn't raise rates … maybe it'll be positive for a couple hours or a couple of weeks," he added. The central bank is in a difficult position because inflation could flare up again if it does stop tightening, according to Eisman.

☆ Wall Street analysts see direct economic growth hit from SVB fallout
▼ + stars: | 2023-03-16 | by ( ) www.reuters.com time to read: 1 min

March 16 (Reuters) - The crisis in small and mid-sized banks in the United States after the swift downfall of SVB Financial Group (SIVB.O) could further slow down the struggling economy and raises the probability of a recession this year, according to Wall Street analysts. J.P.Morgan said the slower loan growth at mid-size banks could trim a half to one percentage point off the level of GDP over the next year or more. Goldman Sachs raised its probability of the U.S. economy entering a recession in the next 12 months by 10 percentage points to 35%, citing the stress on the small banks. Reporting by Aniruddha Ghosh in Bengaluru; Editing by Dhanya Ann ThoppilOur Standards: The Thomson Reuters Trust Principles.

☆ Credit Suisse sued by U.S. shareholders over finances, controls
▼ + stars: | 2023-03-16 | by ( ) www.cnbc.com time to read: +1 min

U.S. shareholders of Credit Suisse Group AG sued the Swiss bank on Thursday, claiming that the bank defrauded them by concealing problems with its finances. The proposed class action accuses Credit Suisse of deceiving investors by failing to disclose that it was suffering from "significant" customer outflows, and that it had material weaknesses in its internal controls over financial reporting. Credit Suisse declined to comment on the lawsuit, which was filed in federal court in Camden, New Jersey. Turner, the named plaintiff, sued on behalf of holders of Credit Suisse's American depositary shares from March 10, 2022, to March 15, 2023. The case is Turner v Credit Suisse Group AG et al, U.S. District Court, District of New Jersey, No.

☆ U.S. bank deposits have started moving to money market funds - Goldman Sachs
▼ + stars: | 2023-03-16 | by ( ) www.reuters.com time to read: +1 min

March 16 (Reuters) - Goldman Sachs said deposits have started to move out of U.S. banks and towards money markets funds, as investors seek the safety in Treasury securities amid worries about stresses in the banking sector. Retail money market funds have seen large and accelerating inflows over the last week, Goldman said in a note on Thursday, likely suggesting some migration away from deposits. Following the collapse of SVB Financial Group and Signature Bank, U.S. regional bank stocks have had a bruising last few days, as investors worried about possible deposit outflows causing capital issues at other regional banks. Money markets appear to have continued functioning fairly well in recent days, and facilities such as the Federal Home Loan Banks lending channel and the Bank Term Funding Program should help maintain "healthy" market functioning even if financing needs spike, Goldman notes. Reporting by Susan Mathew in Bengaluru; Editing by Shailesh KuberOur Standards: The Thomson Reuters Trust Principles.

☆ Wall Street down as Credit Suisse sparks fresh bank selloff
▼ + stars: | 2023-03-15 | by ( David Carnevali | ) www.reuters.com time to read: +4 min

I don’t think we are at 2008-2009 stages by any means when it comes to the contagion stuff," said Themis Trading co-manager of trading, Joe Saluzzi. Still, Credit Suisse troubles piled more pressure on U.S. banking sector after U.S. authorities relieved investors with emergency measures to prevent contagion after the collapse of SVB Financial (SIVB.O) and Signature Bank (SBNY.O). Some investors believe aggressive U.S. interest rate hikes by the Federal Reserve caused cracks in the financial system. Shares of Western Alliance Bancorp (WAL.N) and bank and brokerage Charles Schwab Corp (SCHW.N) bucked the trend to close in the green. Big U.S. banks including JPMorgan Chase & Co (JPM.N), Citigroup (C.N) and Bank of America Corp (BAC.N) dropped, dragging on the S&P 500 banking index (.SPXBK).

☆ U.S. banks' CDS prices surge as contagion concern widens
▼ + stars: | 2023-03-15 | by ( Mehnaz Yasmin | ) www.reuters.com time to read: +3 min

March 15 (Reuters) - A jump in the cost for Wall Street banks to insure bonds against default on Wednesday was another worrisome indicator of credit stress for investors amid the crisis at Credit Suisse and at U.S. regional banks. Swiss bank Credit Suisse (CSGN.S) fell to a record low on Wednesday. Five-year credit default swaps for the flagship Swiss bank hit a new record high. Credit default swaps on Credit Suisse also inverted on Wednesday with the two-year rising above the five-year, and both hit a new 52-week high, according to data from Ortex. Some analysts believe that the larger banks are resilient and are more worried about the smaller and mid-sized banks.

☆ Fact Check-CNBC did not publish article linking U.S. movie theatre group AMC to Silicon Valley Bank collapse
▼ + stars: | 2023-03-15 | by ( Reuters Fact Check | ) www.reuters.com time to read: +2 min

Social media users are sharing a screenshot of a purported CNBC report that links U.S. movie theater chain AMC Entertainment Holdings Inc to the Silicon Valley Bank (SVB) collapse, but the CNBC report is fabricated. There is no record of the alleged article on the CNBC website and a spokesperson for CNBC told Reuters that it had never published such a report. Differences between the alleged article shared on social media and a real article by Macheel can be seen in this comparison, with the fake article on the left and the authentic one on the right (imgur.com/a/QYUbddc). There is no record of the fabricated article on the CNBC website and a CNBC spokesperson outlet told Reuters that it had never published such a report. Read more about our work to fact-check social media posts (here).

☆ Fact Check-‘The Simpsons’ did not predict collapse of Silicon Valley Bank
▼ + stars: | 2023-03-15 | by ( Reuters Fact Check | ) www.reuters.com time to read: +1 min

A clip from a 1995 episode of “The Simpsons” animated series that shows the Silicon Valley Bank (SVB) running out of money has been altered to claim that the show predicted the start-up focused bank’s collapse decades ahead of its time. In the video, panic ensues as character Burt Simpson announces to customers waiting at a bank “What do you mean the bank is out of money? The bank in the original episode is the First Bank of Springfield, named after the fictitious town, where the show is set. Reuters has previously fact-checked several other claims that falsely suggested “The Simpsons” predicted important world events (here), (here) and (here). A 1990s episode of The Simpsons about a bank failure was edited to substitute the name Silicon Valley Bank instead of First Bank of Springfield.

☆ Exclusive: U.S. regulator taps Piper Sandler in new bid to sell Silicon Valley Bank -sources
▼ + stars: | 2023-03-15 | by ( David French | ) www.reuters.com time to read: +1 min

March 15 (Reuters) - Regulators at the U.S. Federal Deposit Insurance Corp (FDIC) have tapped investment bank Piper Sandler Companies (PIPR.N) to relaunch the auction of failed lender Silicon Valley Bank, people familiar with the matter said on Wednesday. The development shows how the FDIC is preparing a concerted effort to sell Silicon Valley Bank after regulators took it over last Friday and agreed on Sunday to guarantee all of its deposits. A weekend action launched by FDIC to sell Silicon Valley Bank failed on Sunday after major banks balked at carrying out such a risky deal in a short amount of time. The FDIC will try to sell Silicon Valley Bank in its entirety but also explore piecemeal deals, one of the sources said. The parent of Silicon Valley Bank, SVB Financial Group (SIVB.O), said on Monday it was separately exploring options for its other assets, that include an investment bank and an investment business.

U.S.-listed shares of Credit Suisse slid 24.3% to hit a record low, after the Swiss bank's largest investor said it could not provide more financial assistance to the lender. Big U.S. banks including JPMorgan Chase & Co (JPM.N), Citigroup (C.N) and Bank of America Corp (BAC.N) fell between 5% and 1%. The KBW regional banking index (.KRX) slid 3.8% while the S&P 500 banking index (.SPXBK) dropped 4.2%%. "Given all the turmoil with Silicon Valley Bank and Signature Bank, expectations have dramatically risen come that the Fed will keep rates unchanged, or maybe raise them (by) 25 basis points." Shares of Charles Schwab Corp (SCHW.N) fell 1.9%, a day after its chief executive said the firm has enough liquidity.

☆ How SVB Financial Group imploded in two days
▼ + stars: | 2023-03-15 | by ( ) www.reuters.com time to read: 1 min

March 14 (Reuters) - The swift downfall of SVB Financial Group (SIVB.O), the biggest collapse of a bank since Washington Mutual in 2008, has sparked fears of contagion in the financial sector and affected every asset class from stocks to forex. Bank stocks globally saw hundreds of billions of dollars wiped away from their market valuation in the aftermath of the collapse, which also shook the startup community the Santa Clara, California-based bank was mainly lending to. Below is a timeline of key events:Reporting by Mehnaz Yasmin in Bengaluru; Editing by Maju SamuelOur Standards: The Thomson Reuters Trust Principles.

However, regional banks pared early gains in premarket trading on Wednesday, with First Republic Bank (FRC.N) down 0.7%. Big U.S. banks such as JPMorgan Chase & Co (JPM.N), Citigroup (C.N) and Bank of America Corp (BAC.N) fell between 1.2% and 2.3%. ET, which is expected to show a moderation in producer price growth in February both on a monthly and annual basis. ET, Dow e-minis were down 517 points, or 1.61%, S&P 500 e-minis were down 63 points, or 1.61%, and Nasdaq 100 e-minis were down 162 points, or 1.33%. Reporting by Amruta Khandekar and Shubham Batra in Bengaluru; Editing by Dhanya Ann Thoppil and Vinay DwivediOur Standards: The Thomson Reuters Trust Principles.

☆ Futures fall as caution about banks lingers, economic data awaited
▼ + stars: | 2023-03-15 | by ( ) www.reuters.com time to read: +3 min

After the recent collapse of SVB Financial (SIVB.O) and Signature Bank (SBNY.O), assurances and emergency measures by U.S. authorities allayed worries about the health of other banks to some extent. Regional banks extended gains to premarket trading on Wednesday after a strong rebound in the previous session. First Republic Bank (FRC.N) jumped nearly 13%, with peers Western Alliance Bancorp (WAL.N) and PacWest Bancorp (PACW.O) up 8.3% and 6.5%, respectively. Big U.S. banks such as JPMorgan Chase & Co (JPM.N), Citigroup (C.N) and Bank of America Corp (BAC.N) edged lower between 0.2% and 0.8%. ET, Dow e-minis were down 171 points, or 0.53%, S&P 500 e-minis were down 19.25 points, or 0.49%, and Nasdaq 100 e-minis were down 51.75 points, or 0.42%.

☆ First Republic spoke to private equity before securing financing -sources
▼ + stars: | 2023-03-15 | by ( ) www.reuters.com time to read: +3 min

NEW YORK, March 15 (Reuters) - First Republic Bank (FRC.N) spoke to at least one private equity firm about raising capital before it secured financing from JPMorgan Chase & Co (JPM.N) and U.S. authorities intervened with support for the industry, two sources familiar with the matter said. First Republic had various approaches and ideas put to it, a third source familiar with the matter said, adding that private equity firms have capital to deploy and were looking for opportunities. They added that the private equity deal talks ended once First Republic announced its credit line with JPMorgan. First Republic said on Sunday night it had secured additional financing through JPMorgan, giving it access to a total of $70 billion in funds through various sources. In some cases, the situation had flipped from banks looking for capital to investors seeking bargains, one of the sources said.

NEW YORK, March 14 (Reuters) - SVB Financial Group (SIVB.O) said on Tuesday that Goldman Sachs Group Inc (GS.N) was the acquirer of a bond portfolio on which it booked a $1.8 billion loss, a transaction that set in motion the failure of SVB. The loss on the portfolio was the reason SVB, a technology-focused lender known as Silicon Valley Bank, attempted a $2.25 billion stock sale last week using Goldman Sachs as an adviser. The portfolio SVB sold to Goldman Sachs on March 8 consisted mostly of U.S. Treasuries and had a book value of $23.97 billion, SVB said. The transaction was carried out "at negotiated prices" and netted the bank $21.45 billion in proceeds, SVB added. Goldman Sachs' purchase of the bond portfolio was handled by a division that was separate from the unit that handled SVB's stock sale, according to a source familiar with the matter.

Investors have purchased the debt of Silicon Valley Bank’s parent at distressed levels in hopes of profiting in a possible sale of assets. Creditors of Silicon Valley Bank’s parent company have formed a group in anticipation of a potential bankruptcy filing, through which they hope to profit from a sale of the collapsed firm’s private-wealth and other units, according to people familiar with the matter. The investor group, which is being advised by PJT Partners Inc., includes Centerbridge Partners LP, Davidson Kempner Capital Management LP and Pacific Investment Management Co., or Pimco, the people said. Most members bought parent SVB Financial Group ’s bonds coming into the weekend as they traded down to around 30 cents on the dollar, the people said. The group now holds a sizable chunk of SVB Financial’s $3.4 billion face value of bonds.

SVB said on Monday it was considering strategic alternatives for its assets but did not disclose bankruptcy as one of the potential options. SVB has not made any final decisions on the path it will take and is still attempting to find buyers for assets without filing for bankruptcy, the people said.A bankruptcy filing is only one option SVB is considering. The financial firm is also exploring other restructuring and recapitalization alternatives built around its investment bank and venture capital business, one of the people said. SVB's investment bank and venture capital business are separate divisions of the company from Silicon Valley Bank, which California regulators closed last week after a run by depositors. Reuters reported on Wednesday that the FDIC hired Piper Sandler Companies (PIPR.N) as adviser to sell Silicon Valley Bank.

☆ Goldman Sachs cuts U.S. GDP forecast after banking crisis
▼ + stars: | 2023-03-15 | by ( ) www.reuters.com time to read: +1 min

March 15 (Reuters) - Goldman Sachs on Wednesday lowered its forecast for fourth-quarter U.S. gross domestic product (GDP) growth, citing risks to the lending environment as smaller banks pull back on loans to preserve liquidity in the face of a banking crisis. Analysts at the firm now expect year-over-year growth of 1.2% for the quarter, down 0.3 percentage points from their previous estimate. Goldman Sachs said stress at some banks persists despite federal agencies having acted aggressively to bolster the financial system. On Tuesday, ratings agency Moody's revised its outlook on the U.S. banking system to "negative" from "stable". Reporting by Niket Nishant in Bengaluru; Editing by Devika SyamnathOur Standards: The Thomson Reuters Trust Principles.

☆ Goldman’s new strategy gets baptism of fire
▼ + stars: | 2023-03-15 | by ( Jeffrey Goldfarb | ) www.reuters.com time to read: +4 min

NEW YORK, March 15 (Reuters Breakingviews) - The collapse of Silicon Valley Bank is providing a slightly awkward showcase for Goldman Sachs’ (GS.N) manifold talents. It’s true to the new unified “One Goldman Sachs” strategy expounded by Chief Executive David Solomon, dampened by the client not living to tell the tale. The investment bank Solomon now leads scrambled throughout the financial crisis to help panicked clients shore up their finances. SVB’s financial models had to be revised on the fly and approved by its board as the situation deteriorated. There also was no soothing imprimatur from Buffett, or a rich Silicon Valley grandee such as Larry Ellison, Steve Ballmer or Larry Page.

☆ Goldman Sachs bought the SVB bonds whose $1.8 billion loss set off the startup lender's meltdown
▼ + stars: | 2023-03-15 | by ( Zahra Tayeb | ) www.businessinsider.com time to read: +2 min

Goldman Sachs bought Silicon Valley Bank's bond portfolio whose $1.8 billion loss set off its shocking meltdown. That led to a loss of $1.8 billion for Silicon Valley Bank (SVB). The losses from SVB's bond fire sale was largely a result of the Federal Reserve's aggressive monetary policy over the past year. According to SVB Financial's updated investor deck, the company's $21 billion bond portfolio had a yield of 1.79% and a duration of 3.6 years. Today, the 3-Year US Treasury note yields 4%, a stark difference from the levels at which the bank bought the securities prior to 2022.

☆ Short sellers may pocket $2.3 bln from U.S. bank rout over last three days -S3 Partners
▼ + stars: | 2023-03-15 | by ( ) www.reuters.com time to read: +1 min

March 15 (Reuters) - Short sellers may have raked in $2.29 billion in profit in the past three sessions, as they took advantage of a selloff in regional bank shares following the collapse of SVB Financial Group (SIVB.O) and Signature Bank (SBNY.O), S3 Partners said. SVB Financial and Signature Bank are among the top five most profitable shorts among regional banks this year, the research firm said in a client note. Short sellers have pocketed $3.53 billion so far in March on a mark-to-market basis, according to S3. "SIVB and SBNY short sellers are sitting on massive mark-to-market profits but have no way to realize those profits at the moment," S3 Managing Director Ihor Dusaniwsky said. Short sellers profit from stock declines by borrowing shares of companies that they believe are overvalued, selling them, and then buying them back at a lower price later.

☆ SVB proves even smaller banks are too big to fail
▼ + stars: | 2023-03-15 | by ( Peter Thal Larsen | ) www.reuters.com time to read: +5 min

Yet last weekend U.S. authorities struggled to contain the fallout from the collapse of SVB Financial (SIVB.O), a relatively simple institution about half the size of the defunct Wall Street firm. After 2008, global regulators designed elaborate rules to make banks safer, and to limit the economic impact if they failed. The result was that when SVB failed, it had no additional buffer, leaving uninsured depositors potentially on the hook for losses that exceeded its capital. Five days after SVB failed, no buyer has yet come forward. It’s a timely reminder that even smaller banks can be too big to fail.

☆ SVB's failure is being investigated by US authorities, report says
▼ + stars: | 2023-03-15 | by ( Zinya Salfiti | ) www.businessinsider.com time to read: +3 min

Silicon Valley Bank's failure is being investigated by US authorities, the WSJ reported. The DOJ fraud squad and the SEC are looking into stock sales by SVB officers before the bank collapsed. US investigators are looking into stock sales made by executives at SVB Financial — the group that owns the lender — only days before the bank collapsed, the report said. From April to December last year, SVB didn't have a chief risk officer at work, Bloomberg reported Tuesday. The DOJ and SVB didn't immediately respond to Insider's request for comment on the probe.

☆ First Republic Bank stock tumbles on credit downgrade and deposit worries
▼ + stars: | 2023-03-15 | by ( Matt Egan | ) edition.cnn.com time to read: +2 min

New York CNN —First Republic Bank’s credit rating was downgraded on Wednesday by both Fitch Ratings and S&P Global Ratings on concerns that depositors could pull their cash despite the federal intervention. Fitch also placed another regional bank, PacWest Bancorp, on watch for a potential credit ratings downgrade of its own. The moves reflect continued worries about the banking system in the aftermath of the collapse of Silicon Valley Bank and Signature Bank. Both credit ratings firms pointed to the large amount of deposits at First Republic that are uninsured because they are above the $250,000 FDIC limit. Moody’s Investors Service on Tuesday cut its outlook for the entire US banking sector and placed six US banks on review for potential credit rating downgrades, including First Republic.

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