More than $100bn wiped off US banks after collapse of Silicon Valley Bank
Trading was halted in dozens of regional banks after $100bn was erased following the collapse of SVB (Picture: AFP)
More than $100bn has been wiped off US banks’ value as the collapse of Silicon Valley Bank continues to send shockwaves throughout Wall St.
Trading was temporarily halted in dozens of regional banks this morning as shares fell by up to 75 percent, despite Joe Biden’s assurances that ‘US banking is safe.’
Major US banks were also affected by the crash as fear spread throughout the market, with Wells Fargo plummeting 7.5 percent, Bank of America falling 7.4 percent, Citigroup plunging 5.8 percent and JP Morgan down 2.7 percent.
US President Joe Biden insisted that the system was safe after the second and third largest bank failures in the nation’s history happened in the span of 48 hours.
In response to the crisis, regulators guaranteed all deposits at the two banks and created a programme that effectively threw a lifeline to other banks to shield them from a run on deposits.
‘Your deposits will be there when you need them,’ Mr Biden told the public, seeking to project calm.
He also said the banking executives responsible for the failures would be held accountable.
Despite the message from the White House, investors broadly dumped shares in bank stocks.
Shares of First Republic Bank closed down more than 60% even after the bank said it was taking emergency funding from the Federal Reserve and additional money from JPMorgan Chase.
Shares in KeyCorp and Comerica plunged by nearly a third. The stock of well-known franchises such as Charles Schwab, Fifth Third Bank, Truist and Huntington Bancshares all dropped by double digits.
The sell-off happened in part because the country woke up to a new banking system and investors had to find the winners and losers, banking experts said.
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