US regulators race to stem SVB collapse panic: reports

Reuters Videos

STORY: Queues were seen outside a First Republic Bank branch in California on Saturday, with worried customers wanting to withdraw funds after the sudden collapse of Silicon Valley Bank.

Startup-focused lender SVB Financial Group on Friday became the largest bank to fail since the 2008 financial crisis.

It’s worrying some analysts and prominent investors, who warned on Saturday that without a resolution by Monday, other banks could come under pressure if people worried about their deposits.

Media reports on Saturday said U.S. financial authorities were racing to contain the fallout of the collapse.

With Bloomberg News saying the Federal Reserve and Federal Deposit Insurance Corporation, or FDIC, were weighing the creation of a fund that would allow regulators to backstop more deposits at banks that run into trouble.

According to the report, regulators discussed the so-called “new special vehicle” with banking executives, in hope that such a measure would reassure depositors and help stem any panic.

The Federal Reserve declined to comment on the report, while FDIC did not immediately respond to a Reuters request for comment.

The White House said earlier on Saturday that President Joe Biden had spoken with California Governor Gavin Newsom about efforts to address the issue, but did not give details.

In a statement, Newsom said, "Everyone is working with FDIC to stabilize the situation as quickly as possible."

This comes as sources told Reuters, SVB’s downward spiral was kicked off by a warning from Moody’s that it was preparing to downgrade the bank’s credit rating, just days before it imploded.

And it was its failed response to the prospect of the downgrade that eventually led to the two-day run on the bank.

That wiped out more than $100 billion in market value for U.S. banks, before regulators stepped in on Friday and put the bank in receivership.

Latest stories

  • Do Kwon: S. Korea's crypto 'genius' turned disgraced fugitive

    Once hailed as a genius, South Korean entrepreneur Do Kwon -- now facing multiple criminal charges over his failed cryptocurrency -- was a brash industry figure whose fame disintegrated into global notoriety.Yet as recently as March 2022, Kwon was being described in glowing South Korean media reports as a "genius" as thousands of private investors lined up to pour cash into his company.

  • Small banks lost $120 billion in deposits during SVB tumult

    Customers withdrew $120 billion from regional banks in one week, while giving $67 billion to industry giants

  • Vince McMahon Pays WWE $17.4 Million to Cover Sexual Misconduct Investigation Costs

    It is unknown if further action will be taken against the executive chairman

  • IMF chief warns risks to financial stability have increased

    International Monetary Fund chief Kristalina Georgieva warned on Sunday that risks to financial stability had increased and stressed "the need for vigilance" following the recent turmoil in the banking sector."It is also clear that risks to financial stability have increased," she added.

  • Bank failures and rescue test Yellen's decades of experience

    Working against the clock to stop a developing banking crisis, Treasury Secretary Janet Yellen had until sunset on Sunday, March 12, to come up with a plan to calm the U.S. economy. Paulson, who ran the Treasury Department during the financial crisis in 2008, counseled immediate government action. A bank run on Silicon Valley Bank had begun earlier in the week.

  • Wall Street ends green as Fed officials soothe bank jitters

    STORY: U.S. stocks closed higher on Friday, marking the end of a turbulent week as U.S. Federal Reserve officials calmed investor fears over a potential liquidity crisis in the banking sector.The Dow climbed 4-tenths of one percent. The S&P 500 rose about half of a percent and the Nasdaq gained 3-tenths of a percent.In separate appearances, three regional fed bank presidents said that their confidence in the banking system is what allowed them to stay focused on inflation and implement a 25 basis point rate hike on Wednesday.But worries over potential contagion spreading from regional banks to their larger peers persisted, sparked by a sell-off of European bank shares.That sell-off was prompted by the rising cost of insuring Deutsche Bank's debt, coming on the heels of the state-sponsored buyout of Credit Suisse.U.S.-traded shares of Deutsche Bank dropped 3%.“We continue to see weakness and stress in financials….”Banríon Capital Management Founder and CEO Shana Sissel says we are starting to see more divergence in the performance of various sectors as the economy softens. “And we continue to see weakness and stress in cyclical areas. Areas that are doing well are things like utilities, staples, things of that nature. So you're seeing the market kind of bifurcate between things that should do OK as we see economic stress. Versus where the actual stress is."Among other movers, Activision Blizzard jumped nearly 6-percent after the UK competition regulator dropped some competition concerns in the Microsoft-Activision deal. 

  • Vince McMahon Reimburses WWE $17.4 Million for Costs Related to Sexual Misconduct Investigation

    Vince McMahon has paid WWE $17.4 million for costs the wrestling entertainment company incurred in investigating misconduct allegations against the exec. McMahon, WWE’s executive chairman and controlling shareholder, returned to the company in January after he “retired” from the company last year. WWE’s board had formed a special committee to look into allegations that he […]

  • Ford CEO: Tesla is going to see 'more price competition' in the EV market

    Ford CEO Jim Farley is all in on taking the fight to Tesla.

  • A Three Arrows Capital Founder Talks About His New Crypto Bankruptcy Exchange

    Less than a year after Three Arrows Capital imploded along with $2.5 billion of its clients' money, the hedge fund's founders Su Zhu and Kyle Davies are back on the scene with what appears, to their credit, to be an impressive bankruptcy exchange, but is it too soon?

  • Fed's Bullard sees more rate hikes as bank stress abates

    St. Louis Fed President James Bullard is optimistic stresses in the the banking system will abate in the weeks and months ahead.

  • J-Kom D-G: Stop politicising PM Anwar’s trip to Saudi Arabia

    KUALA LUMPUR, March 26 — Community Communication Department (J-Kom) director-general Mohammad Agus Yusoff today urged al...

  • Mark Zuckerberg welcomes third daughter with wife Priscilla Chan

    The couple are parents to daughter Maxima, seven, and August, five

  • Who Is Shou Zi Chew? Everything We Know About The Embattled TikTok CEO

    TikTok CEO Shou Zi Chew was grilled for around four-and-a-half hours by a bipartisan US Congress on 23 March amid increasing calls for a ban on the platform in the US over concerns about the Chinese government’s influence on the company. Chew was called to testify before the House Energy and Commerce Committee about TikTok’s “consumer privacy and data security practices, the platforms’ impact on kids, and their relationship with the Chinese Communist Party.” Members of both the Democratic Party

  • Calvin Klein’s latest ‘Calvins or Nothing’ campaign bares it all for artistic excellence

    Calvin Klein debuts its ‘Calvin or nothing’ Spring 2023 campaign starring celebrities at the fore front of artistry baring it all. What comes to mind when we think of Calvin Klein? Minimalism, sensuality and artistry. The latest chapter in Calvin Klein’s ‘Calvins or nothing’ campaign captures exactly that as the world’s biggest names in music, film and fashion strip back in unadulterated confidence. The new collection is Calvin Klein doing what it knows best — minimalist, comfortable fashion for

  • Klopp tells Liverpool defender he has no future as brutal nine-player clearout gathers pace

    Klopp is planning wholesale changes this summer with the German reportedly now telling a defender he is part of a massive nine-man clearout

  • Nicholas Lloyd Webber, Composer and Son of Andrew Lloyd Webber, Dies at 43

    Nicholas Lloyd Webber, son of Andrew Lloyd Webber, died in Basingstoke, England on March 25, after an 18-month-long battle with gastric cancer. He was 43. The theater composer announced the news of his son’s death on Saturday. “I am shattered to have to announce that my beloved elder son Nick died a few hours ago […]

  • John Wick’s Future: Explaining That Shocking ‘Chapter 4’ Ending and the Spinoffs, Prequels and More on the Way

    SPOILER ALERT: Spoilers are ahead for “John Wick: Chapter 4,” now playing in theaters. After killing countless High Table henchmen, falling down hundreds of stairs and dueling one blind master swordsman, Keanu Reeves’ John Wick is…dead? “John Wick: Chapter 4” ends with Wick seemingly six feet under, after succumbing to three gunshot wounds he suffered […]

  • Out of GTA and snubbed by Perikatan, what’s next for Pejuang? Analysts say state polls may be decider

    KUALA LUMPUR, March 26 — Several political analysts polled by Malay Mail have not written off Parti Pejuang Tanahair...

  • Man Utd report: Sheikh Jassim meets £6bn Glazer valuation as takeover edges closer

    The Qatar Islamic Bank president met the Glazer family for two rounds of talks last week and has reportedly blown Jim Ratcliffe out of the water...

  • Mbappe and France crush Netherlands, Lukaku hits Belgium hat-trick

    Kylian Mbappe marked his first game as France captain with a brace in a 4-0 demolition of the Netherlands in Euro 2024 qualifying on Friday, while Romelu Lukaku scored a hat-trick as Belgium began a new era with a 3-0 victory in Sweden.The 41-year-old Zlatan Ibrahimovic came off the bench for Sweden before Lukaku made it 3-0 with another easy finish.