United States authorities continue efforts to calm markets. This Thursday (16) the US Treasury Secretary, Janet Yellen, reaffirmed that the US banking system is solid, despite the recent turmoil caused by the failure of three banks, including SBV and Signature Bank. Eleven American banks joined together to deposit US$30 billion in First Republic, which was threatening to fail. In Europe, the government's signal of help to Credit Suisse sent the bank's shares soaring.
Three consecutive bank failures in less than a week mark the worst failures since the 2008 financial crisis and prompted US authorities to take drastic measures very quickly to protect deposits.
The authorities' assessment was that there was a “serious risk of contagion and mass withdrawals” among customers who had resources above those guaranteed by the federal apparatus in these two banks, explained the secretary, in a Senate committee.
The Federal Reserve (Fed, American Central Bank) also announced a mechanism to grant resources to banks, if necessary, to meet the demand of their customers.
“This week’s actions demonstrate our commitment to ensuring that our financial system remains strong, and account holders’ deposits remain safe,” Yellen told the Senate Finance Committee.
“I can assure the members of the Commission that our banking system is solid,” she added at the hearing, initially intended to address the Biden administration’s federal budget proposal.
First Republic was another bank in the US that was in the eye of the storm on Wall Street, with shares falling. The institution's shares, however, recovered strongly after information that other banks would come to its aid.
Eleven U.S. banks, including Bank of America, Citigroup and JPMorgan, agreed to deposit $30 billion with First Republic, signaling their “confidence in the country’s banking system,” according to a joint statement.
“This action by the largest banks in the United States reflects their confidence in First Republic and banks of all sizes,” highlighted the group, after the failure of three entities in the sector in less than a week.
Founded in 1985, in San Francisco, First Republic is the 14th American bank by volume of assets, with US$212 billion at the end of 2022. It provides private banking services to individuals and companies, as well as wealth management.
Credit Suisse shares closed sharply higher this Thursday (16) – 19,15% – after the bank received support from the Swiss Central Bank to reassure the markets, the day after the worst session in its history.
Credit Suisse announced, in the early hours of Thursday, that it would requestaria a loan of up to 50 billion Swiss francs ($53,7 billion) from the Central Bank, in addition to other measures.
(Source: AFP)
Read also
This post was last modified on March 17, 2023 00:38 pm
SynthID, announced in August 2023 as a watermark to identify images generated…
Alphabet, controller of Google, revealed on Tuesday (14) Trillium, a new member of the family…
The controller of Google, Alphabet, showed on Tuesday (14) how it is investing in artificial intelligence…
Meta, the parent company of Facebook, announced on Tuesday (14) that it will close the Workplace application, aimed…
A Tesla was sued by a non-profit environmental organization that accused the company…
Last Monday (13), the OpenAI announced the launch of GPT-4o, a new…