Shareholders are preparing to force the securities. This will allow banks to receive face value to help increase liquidity.
After the collapse of Silicon Valley Bank, the shares of leading banks began to fall even as the Federal Reserve and the US Treasury announced the introduction of emergency measures aimed at reducing the negative impact on the banking system. This was reported by Reuters.
According to the publication, on Monday, March 13, in the US market, the shares of First Republic Bank fell by 65.1%, despite the news that it received additional financing, while the shares of Western Alliance Bancorp, PacWest Bancorp and Charles Schwab fell 75%. .9 %, 41.0% and 19% respectively. The trading of shares was also stopped several times.
Shares of other major US banks, including JP Morgan Chase, Morgan Stanley and Bank of America, also fell.
Big European banks also felt the impact. In STOXX, the share reduction in one day is more than a year – 6.3%. Germany’s Commerzbank fell 12.7% and Credit Suisse hit a new record low after falling 15%.
Yields on short-term US Treasuries fell to their lowest in nearly 15 years, with two-year Treasury yields down 44 basis points, according to Markets Insider.
At the same time, the price of gold and cryptocurrencies increased. Gold rose in price by 2.09% and $1906.20 per ounce. Bitcoin rose 0.36% to $22,411.
It is noted that shareholders are preparing to force their securities. This will allow banks to receive face value to help boost liquidity when needed.
According to Oppenheimer analyst Chris Kotovsky, one of the first consequences of SVB’s collapse is that depositors will begin withdrawing their deposits from other banks. The main problem is the high percentage of uninsured SVB deposits, because most of the bank’s customers have no guarantees for their money to be returned.
It can be recalled that the US authorities closed the New York Signature Bank following the larger Silicon Valley Bank (SVB).
After that, the President of the United States of America, Joe Biden, spoke to the citizens of the United States and said that “the American people can be sure that the banking system is safe.” He noted that his administration took immediate action after the banking incident.
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Source: korrespondent
I am David Wyatt, a professional writer and journalist for Buna Times. I specialize in the world section of news coverage, where I bring to light stories and issues that affect us globally. As a graduate of Journalism, I have always had the passion to spread knowledge through writing.