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Tag: credit

  • Flagstar Bank to take over most of Signature Bank’s deposits, FDIC says

    Flagstar Bank to take over most of Signature Bank’s deposits, FDIC says

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    Flagstar Bank, a subsidiary of New York Community Bankcorp Inc., on Sunday agreed to assume most of Signature Bank’s deposits and some of its loans.

    New York-based Signature Bank was closed by regulators last week, following the failures of Silicon Valley Bank and Silvergate Bank.

    In a statement Sunday, the Federal Deposit Insurance Corp. said Flagstar will take over Signature’s 40 former branches effective Monday, and they will operate as normal.

    Signature Bank depositors will automatically become Flagstar depositors, the FDIC said, with all deposits insured up to their limits. About $4 billion in deposits related to Signature’s digital banking business is not included in the deal, and the FDIC will provide those deposits directly to customers.

    Sunday’s deal includes the purchase of about $38.4 billion in assets from the former Signature Bank,  including loans of $12.9 billion purchased at a discount of $2.7 billion.

    About $60 billion in Signature’s loans will remain in receivership for later disposition by the FDIC. The FDIC also received equity appreciation rights in New York Community Bancorp
    NYCB,
    -4.66%
    common stock with a potential value of up to $300 million.

    The FDIC estimated that the cost of the failure of Signature Bank to its Deposit Insurance Fund will be about $2.5 billion.

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  • Here’s why UBS’s deal to buy Credit Suisse matters to U.S. investors

    Here’s why UBS’s deal to buy Credit Suisse matters to U.S. investors

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    Thousands of miles away from U.S. shores last Wednesday, a headline began working its way across Europe, then Wall Street, sparking fresh panic as it dawned on investors that they may be facing yet another banking crisis.

    Shares of Credit Suisse
    CS,
    -6.94%

    CSGN,
    -8.01%
    would eventually sink 25% last week to a fresh record low, unable to find footing days after the head of top shareholder Saudi National Bank said they won’t invest any more in the bank. By Sunday, the struggling Swiss bank had a new owner, leaving investors to wonder if at least one chapter in a current roller coaster of global banking stress can be closed.

    Swiss authorities steered rival UBS AG
    UBS,
    -5.50%
    to an all-stock deal worth 3 billion francs ($3.25 billion), or 0.76 francs per share, a not-so-slight discount to the 1.86 franc close on Friday of Credit Suisse. So important was the agreement, it was announced by Switzerland’s President Alain Berset, with both banks and the chairman of the Swiss National Bank on either side of him.

    “With the takeover of Credit Suisse by UBS, a solution has been found to secure financial stability and protect the Swiss economy in this exceptional situation,” the SNB said in a statement.

    The Swiss National Bank said either Swiss bank can borrow up to 100 billion francs in a liquidity assistance loan, and Credit Suisse will get a liquidity assistance loan of up to 100 billion francs, backed by a federal default guarantee. The U.S. Federal Reserve had worked with its Swiss counterpart on the deal as well.

    “We welcome the announcements by the Swiss authorities today to support financial stability. The capital and liquidity positions of the U.S. banking system are strong, and the U.S. financial system is resilient,” said a statement Sunday by Treasury Secretary Janet Yellen and Federal Reserve Chairman Jerome Powell.

    European Central Bank President Christine Lagarde also praised Swiss authorities for “restoring orderly market conditions and ensuring financial stability,” while reiterating the “resilience” of the euro-area banking sector. She said the ECB stands ready to provide liquidity if needed.

    Her comment comes days after the the ECB pulled the trigger Thursday on a 50-basis-point rate hike, as it warned “inflation is projected to remain too high for too long.”

    The deal for Credit Suisse comes in the wake of stress on the U.S. banking sector, triggered by the collapse of Silvergate Bank, Silicon Valley Bank and Signature Bank, all within the space of a week.

    “Virtually everyone at this high-level Swiss press conference — government officials, regulator, central bank governor, and executives of the two banks — blamed the US banking sector turmoil for being the catalyst for the financial turmoil in #Switzerland,” tweeted Mohamed A. El-Erian, chief economic adviser at Allianz, of the press conference Sunday with Swiss authorities to announce the deal.

    And for U.S. investors who have had quite enough anxiety lately, a logical question would be to ask if the deal that brings together the two Swiss banking giants will now remove one layer of stress from global markets, and hence Wall Street.

    For that reason, many will be watching how Asian and U.S. equity futures trade later on Sunday, as well as Europe’s opening reaction on Monday.

    The Credit Suisse news may only go so far to assuage investors, with some raising an eyebrow over Powell and Yellen’s Sunday statement about the Swiss deal. “Seriously, if everyone truly believed the ‘The capital and liquidity positions of the U.S. banking system are strong, and the U.S. financial system is resilient’ … Would they have to tell us? Are these words enough?” said Jim Bianco, president of Bianco Research, on Twitter. “Or do investors want to see Warren Buffett writing checks to regional banks in the next two hours (before Asia opens)?”

    Fox News and other media outlets reported over the weekend that the Berkshire Hathaway
    BRK.A,
    -2.76%

    BRK.B,
    -2.81%
    chairman and CEO had been talking to President Joe Biden’s administration in recent days over possible investments in the battered regional bank sector, and offering his advice.

    The billionaire investor was responsible for a capital injection to Bank of America
    BAC,
    -3.97%
    in 2011 as its shares tumbled due to subprime mortgages, as well as $5 billion to Goldman Sachs
    GS,
    -3.67%
    amid the 2008 financial crisis.

    Some had said ahead of the deal last week that global-market stability depended on the Swiss first getting their house in order.

    “I don’t think there are any direct consequences for U.S. investors, but it’s extremely negative for sentiment if a major Swiss bank fails, hot on the heels of SVB/SBNY,” Simon Ree, the founder of Tao of Trading options academy school and author of the book by the same name, told MarketWatch last week.

    “The market will be (temporarily) wondering who’s next. It could start to have the optics of a global banking crisis, rather than an idiosyncratic failure of a niche U.S. regional bank,” said Ree.

    Credit Suisse’s troubles came amid a revamp and five straight money-losing quarters, following a painful legacy that included billions worth of exposure to the collapsed Archegos family office and $10 billion worth of funds tied to Greensil Capital it had to freeze.

    Read: In its delayed annual report, Credit Suisse admitted to financial control weaknesses

    “The SNB and the Swiss government are fully aware that the failure of Credit Suisse or even any losses by deposit holders would destroy Switzerland’s reputation as a financial center,” said Otavio Marenzi, CEO of Opimas, a management consulting firm focused on global capital markets, in a note to clients last week.

    The bank’s plummeting stock price and soaring bond yields was “mimicking Silicon Valley Bank’s recent collapse in a frightening way. In terms of the outflow of deposits, Credit Suisse’s position looks even worse,” said Marenzi.

    Over there?

    As far as some are concerned, the market may have more stress ahead of it.

    “The SVB failure highlights the potential for other skeletons to be hidden in closets and the market will spend the next few weeks/months hunting them out. Even just the extreme volatility we’ve seen on bond markets the last five days renders any attempt to ascribe a value to other asset classes redundant,” said Ree.

    Plus: Here’s what’s really protecting your bank deposits

    His view is shared by many analysts, who in part point to increasing uncertainty around how the Federal Reserve will react going forward as it tries to balance market and economic risks. Some now see full percentage rate cuts by year-end, amid banking stress.

    Samantha LaDuc, the founder of LaDucTrading.com who specializes in timing major market inflections, said she stands by her advice (that she shared with MarketWatch in February) that investors are being “paid to wait,” by staying in cash.

    Read: Looking for a place for your cash? Grab these 5% CDs while you still can.

    “I have been literally recommending and tweeting to clients that we are PAID TO WAIT in T-bills at 5% until [the] bond market can figure out if we have recession or not. All that happened last week pulled forward recession risk,” she told MarketWatch.

    Prior to the SVB crisis, she had been recommending clients short reflation trades, such as banks
    XLF,
    -3.22%

    KRE,
    -5.99%    ,
    energy
    XLE,
    -1.57%
    and metals and mining
    XME,
    -0.78%

    COPX,
    +0.63%

    SLX,
    -1.96%    ,
    and has been saying she sees “unattractive risk-reward for either stocks or bonds.”

    Opimas’ Marenzi said the threat to Wall Street from Credit Suisse was simple:

    “You mean what do American investors who do not own any non-American stocks and do not own a passport and could not find Switzerland on a map and who think that anyone who speaks any language other than English is a bit weird have to worry about? Not a lot, other than the contagion spreading back into the US banking system and causing a meltdown,” he told MarketWatch.

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  • UBS to buy Credit Suisse for more than $3 billion in deal backed by Swiss government

    UBS to buy Credit Suisse for more than $3 billion in deal backed by Swiss government

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    Struggling Swiss banking giant Credit Suisse has agreed to be bought by its arch-rival UBS at a discount to Friday’s close price, after seeing a wave of customer deposits exit the bank.

    The deal was announced by Switzerland’s president, Alain Berset, flanked by executives from both banks and the chairman of the Swiss National Bank.

    “With the takeover of Credit Suisse by UBS, a solution has been found to secure financial stability and protect the Swiss economy in this exceptional situation,” the SNB said in a statement.

    UBS
    UBS,
    -5.50%
    will buy Credit Suisse
    CS,
    -6.94%
    for 3 billion francs ($3.25 billion), or 0.76 francs per share, in an all-stock deal, the bank announced.

    That compares to Credit Suisse’s
    CSGN,
    -8.01%
    closing price of 1.86 francs on Friday. The FT reported UBS initially bid just 0.25 francs per share.

    UBS said it benefits from 25 billion francs of downside protection from the transaction to support marks, purchase price adjustments and restructuring costs, and additional 50% downside protection on non-core assets.

    The deal does not need shareholder approval. The Swiss financial regulator said Credit Suisse’s AT1 securities, worth 16 billion francs, will be entirely written down.

    Credit Suisse chairman Axel Lehmann (L) and UBS Chairman Colm Kelleher (R) look on prior to a press conference.


    fabrice coffrini/Agence France-Presse/Getty Images

    “This is a commercial solution and not a bailout,” said Karin Keller-Sutter, the Swiss finance minister. “Bankruptcy would have been the highest risk.”

    The Swiss National Bank said either UBS or Credit Suisse can borrow up to 100 billion francs in a liquidity assistance loan, and Credit Suisse can also receive a liquidity assistance loan of up to 100 billion francs. backed by a federal default
    guarantee.

    The Federal Reserve has been working with its Swiss counterpart on the deal, as both banks have major operations in the U.S.

    Keller-Sutter said she held talks with U.S. Treasury Secretary Janet Yellen and U.K. Chancellor Jeremy Hunt. Keller-Sutter said “many thousands” of Credit Suisse will be affected, pointing to job cuts ahead.

    UBS said the combination of the two businesses is expected to generate annual run-rate of cost reductions of more than $8 billion by 2027. UBS Chairman Colm Kelleher said the investment bank will represent no more than 25% of risk-weighed assets.

    Credit Suisse’s downfall occurred just days after the collapse of U.S. banks SVB Financial and Signature Bank. While Credit Suisse, as well as Swiss authorities, said they didn’t have the same kinds of problems, they also saw customers leave. After wealthy clients withdrew roughly $100 billion from Credit Suisse in the fourth quarter, they again began to see big outflows last week, the FT reported.

    Credit Suisse has lost money for five consecutive quarters, reeling from losses to family office Archegos as well as having to freeze $10 billion of supply chain funds sold through the bank that were managed by Greensill Capital.

    Also read: Saudis, Qataris and Norway to see big losses on UBS deal for Credit Suisse

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  • UBS Said to Offer $1 Billion for Credit Suisse. Here’s Why It Matters.

    UBS Said to Offer $1 Billion for Credit Suisse. Here’s Why It Matters.

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    UBS


    Group has offered to buy Credit Suisse Group for up to $1 billion, the Financial Times reported on Sunday.

    The report said regulators are rushing to complete a deal for


    Credit Suisse


    (ticker: CS) before financial markets open on Monday. A merger of Switzerland’s two largest banks comes against a backdrop of industry turmoil. The potential end of the storied bank shows how far and how quickly worries have spread about the financial sector.

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  • What’s Going on With First Republic Bank?

    What’s Going on With First Republic Bank?

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    First Republic Bank shares have been hit hard over the past week following the failures of two large U.S. regional banks,

    Silicon Valley Bank and Signature Bank. On Thursday, shares of the bank and many other financial firms rallied after the biggest banks in the U.S. swooped in to rescue the San Francisco lender. Under the plan, 11 banks including JPMorgan Chase & Co. placed $30 billion in deposits at First Republic, using their own funds, confirming an earlier report by The Wall Street Journal. 

    But Friday, shares of First Republic dropped anew, sinking more than 30% and leaving analysts to wonder whether it has a future as a stand-alone bank.

    What's News

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  • First Republic Bank’s debt cut to junk by Moody’s

    First Republic Bank’s debt cut to junk by Moody’s

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    Moody’s Investors Service downgraded its credit rating on First Republic Bank to junk late Friday, citing a “deterioration in the bank’s financial profile.”

    First Republic’s
    FRC,
    -32.80%
    debt rating was cut to B2 from Baa1, Moody’s said. Fitch Ratings and S&P Global Ratings downgraded First Republic Bank’s debt earlier this week.

    The downgrade reflects “the deterioration in the bank’s financial profile and the significant challenges First Republic Bank faces over the medium term in light of its increased reliance on short-term and higher cost wholesale funding due to deposit outflows,” Moody’s analysts said in a release.

    They cited various recent developments with First Republic, including the company’s Thursday disclosure that over the previous week its Federal Reserve borrowings ranged from $20 billion to $109 billion. Also Thursday, the bank received a $30 billion deposit infusion from 11 major U.S. banks.

    “Moody’s believes the high cost of these borrowings, combined with the high proportion of fixed rate assets at the bank, is likely to have a large negative impact on First Republic’s core profitability in coming quarters,” the analysts said. “In addition, the rating agency noted that while the news of the banking consortium’s deposits is positive in the short-run, the longer-run path for the bank back to sustained profitability remains uncertain.”

    First Republic is reportedly looking to raise money from other banks or private-equity firms by selling additional shares, according to the New York Times.

    Shares of the company have plunged 80% from the close of trading on March 8, just before Silicon Valley Bank spooked investors with an update on its business and a planned stock sale. First Republic lost 33% in Friday’s session despite the deposit arrangement with the large banks. Shares were down another 6% in the extended session Friday.

    Moody’s said its outlook was maintained at “rating under review.” That review for downgrade, it said, “reflects the continuing challenges to the bank’s medium-term credit profile in light of its significantly eroded deposit base, increased reliance on short-term wholesale funding and sizeable volume of unrealized losses on its investment securities.”

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  • The Dow’s 4 financial stocks are cutting about 170 points off the Dow’s price

    The Dow’s 4 financial stocks are cutting about 170 points off the Dow’s price

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    Financial stocks continued to drag stock stock market down Friday, as the Dow Jones Industrial Average’s
    DJIA,
    -1.19%
    four financial components contributed about 40% of the index’s selloff. Shares of JPMorgan Chase & Co.
    JPM,
    -3.78%
    gave up 3.7%, insurer Travelers Companies Inc.
    TRV,
    -4.17%
    dropped 3.6%, American Express Co.
    AXP,
    -2.62%
    fell 3.2% and Goldman Sachs Group Inc.
    GS,
    -3.67%
    slid 3.0%. The combined price declines of those stocks reduced the Dow’s price by 170 points, while the Dow fell 439 points, or 1.4%. SVB Financial Group’s
    SIVB,
    -60.41%
    bankruptcy filing on Friday showed that the $30 billion infusion into First Republic Bank
    FRC,
    -32.80%
    didn’t mean the crisis in investor confidence was over.

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  • U.S. stocks end lower, Dow books back-to-back weekly losses as banking sector stress reemerges

    U.S. stocks end lower, Dow books back-to-back weekly losses as banking sector stress reemerges

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    U.S. stocks ended lower Friday as worries about banking-sector stability reemerged following a bankruptcy filing by SVB Financial Group and the release of data showing banks borrowed $165 billion from the Federal Reserve over the past week.

    How stocks traded
    • The Dow Jones Industrial Average
      DJIA,
      -1.19%
      fell 384.57 points, or 1.2%, to close at 31,861.98.

    • The S&P 500
      SPX,
      -1.10%
      dropped 43.64 points, or 1.1%, to finish at 3,916.64.

    • The Nasdaq Composite
      COMP,
      -0.74%
      slid 86.76 points, or 0.7%, to end at 11,630.51, snapping a four-day win streak.

    For the week, the Dow fell 0.1%, the S&P 500 gained 1.4% and the Nasdaq climbed 4.4%, according to Dow Jones Market Data. The Dow booked back-to-back weekly losses while the Nasdaq saw its biggest weekly percentage gain since January.

    What drove markets

    U.S. stocks fell Friday as worries about the banking sector persisted.

    “The markets are up and down all this week, and they’re moving typically in big amounts, because there really isn’t any consensus on how the strains in the banking system will play” into the economy, said Paul Christopher, head of global investment strategy at Wells Fargo Investment Institute, in a phone interview Friday. Investors are trying to get a sense for how quickly the economy may be slowing and whether the problems in the banking sector will lead to an “accelerated slowing,” he said.

    Concerns about the banking sector’s ability to withstand deposit flight reemerged Friday morning after SVB Financial Group
    SIVB,
    -60.41%
    announced it had filed for Chapter 11 bankruptcy protection. SVB is the holding company of Silicon Valley Bank , which was put into FDIC receivership last Friday.

    On Thursday, First Republic Bank announced that it would receive $30 billion of uninsured deposits from a group of large U.S. banks. JPMorgan Chase & Co., Citigroup Inc., Bank of America Corp. and Wells Fargo & Co. were among the 11 banks that agreed to provide the deposits.

    Meanwhile, Federal Reserve data released Thursday afternoon in New York showed banks borrowed a combined $165 billion from the central bank. Most of the borrowing occurred via the Fed’s discount window. But a small amount was also tapped through the Fed’s new Bank Term Funding Program that allows bonds trading at a discount to be used as collateral, at par value. The fact that borrowing through the discount window has soared to a record high was adding to the market’s concerns about the banking sector, analysts said.

    See: Banks have borrowed $165 billion from the Fed in past week after SVB failure

    First Republic Bank
    FRC,
    -32.80%
    shares plunged 32.8% Friday, while Credit Suisse Group
    CS,
    -6.94%    ,
    which earlier this week got a lifeline from the Swiss National Bank, closed 6.9% lower, according to FactSet data.

    At least four major banks have put restrictions on trades that involve troubled Swiss lender Credit Suisse Group or its securities, Reuters reported Friday, citing people with direct knowledge of the matter.

    “I think there are still a lot of questions right now,” said Mark Luschini, chief investment strategist at Janney, during a phone interview with MarketWatch. “Investors can’t seem to hold their enthusiasm for equities for longer than a 24-hour news cycle.”

    It’s not hard to understand why investors are still so anxious about the banking sector given the surge in borrowing from the Fed, said Matt Maley, chief market strategist at Miller Tabak + Co.

    “Given that banks borrowed over $150bn at the Fed’s discount window on Wednesday, which compares to $4.4bn the week before, one can understand why investors are worried that the situation might be a bit more dire than the authorities are admitting to right now,” Maley said in emailed commentary.

    In economic news, the Conference Board said Friday that the U.S. leading economic index fell 0.3% in February, marking the 11th straight monthly decline. U.S. industrial production was flat in February, data released Friday by the Fed show.

    Meanwhile, the University of Michigan’s latest reading on consumer sentiment showed consumers were more downbeat in March than at ay time in the last four months.

    While stocks fell Friday, they finished the week mostly higher. The Dow Jones Industrial Average slipped 0.1% for the week, while the S&P 500 booked a 1.4% weekly gain and the technology-heavy Nasdaq Composite saw a weekly rise of 4.4%, according to Dow Jones Market Data.

    Companies in focus
    • FedEx Corp.’s stock 
      FDX,
      +7.97%
       jumped 8% after beating analyst estimates in its fiscal third-quarter earnings. The shipping firm also lifted its profit forecast for the full fiscal year.

    • Shares of PacWest Bancorp 
      PACW,
      -18.95%
      and Western Alliance Bancorp 
      WAL,
      -15.14%
      tumbled as regional banks continued to face pressure, with PacWest falling almost 19% and Western Alliance dropping 15.1%.

    • Shares of Microsoft Corp.
      MSFT,
      +1.17%
      rose 1.2% as analysts saw the latest iteration of Chat GPT giving the tech giant an even greater edge. In other megacap tech names, Alphabet Inc.’s Class A
      GOOGL,
      +1.30%
      shares gained 1.3% while semiconductor giant Nvidia Corp.
      NVDA,
      +0.72%
      advanced 0.7%.

    —Steve Goldstein contributed to this report.

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  • Consumer sentiment falls for first time in four months — and that was before Americans knew about SVB

    Consumer sentiment falls for first time in four months — and that was before Americans knew about SVB

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    The numbers: A survey of consumer sentiment slid to 63.4 in March and fell for the first time in four months, reflecting angst among Americans about high inflation and the health of the economy.

    The preliminary reading in March was down from 67 in February, the University of Michigan said. Most of the survey was completed before the collapse of Silicon Valley Bank.

    Consumer sentiment helps gauge how Americans feel about their own finances as well as the broader economy.

    The index had fallen to a record low of 50 last summer before partly rebounding. Sentiment is still well below a recent peak of 88.3 in 2021, however, and a pre-pandemic high of 101.

    Inflation expectations tapered off a bit but remained fairly high. Consumers expect prices to increase 3.8% in the next year, down from 4.1% in the prior month. That’s the lowest reading since April 2021.

    Key details: A gauge that measures what consumers think about the current state of the economy dropped to 66.4 in March from 70.7in the prior month.

    Sentiment fell the most among lower-income and younger Americans who tend to suffer disproportionately from high inflation. Some wealthier people with large stock holdings were also less confident in light of a recent decline in equities.

    Another measure that asked about expectations for the next six months declined to 61.5 from a prior 64.7.

    Americans think inflation will persist for some time. In the longer run, consumers believe inflation will increase about 2.8% a year, down slightly from 2.9% in the prior month.

    That’s still well above the Federal Reserve’s 2% target, however.

    Fed officials pay close attention to inflation expectations because they could be a harbinger of future price trends.

    The rate of inflation over the past 12 months is 6%, based on the consumer-price index. It’s fallen from a 40-year peak of 9.1% last summer.

    Big picture: Consumer sentiment is still far below levels associated with a healthy economy and it’s hard to see a big improvement anytime soon.

    The Fed is raising interest rates to tame high inflation, a strategy that typically slows the economy.

    Higher rates have also destabilized parts of the U.S. financial system as witnessed by the sudden collapse of Silicon Valley Bank. That’s adding new stress on the economy.

    Market reaction: The Dow Jones Industrial Average
    DJIA,
    -1.19%
    and S&P 500
    SPX,
    -1.10%
    fell in Friday trades amid nagging worries about the U.S. financial system after the SVB failure

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  • Dow falls 200 points on losses in shares of JPMorgan Chase, Goldman Sachs

    Dow falls 200 points on losses in shares of JPMorgan Chase, Goldman Sachs

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    Shares of JPMorgan Chase and Goldman Sachs are retreating Friday morning, sending the Dow Jones Industrial Average into negative territory. The Dow
    DJIA,
    -1.19%
    was most recently trading 199 points (0.6%) lower, as shares of JPMorgan Chase
    JPM,
    -3.78%
    and Goldman Sachs
    GS,
    -3.67%
    have contributed to the index’s intraday decline. JPMorgan Chase’s shares are off $3.52, or 2.7%, while those of Goldman Sachs have dropped $8.17, or 2.6%, combining for an approximately 77-point drag on the Dow. Other components contributing significantly to the decline include American Express
    AXP,
    -2.62%    ,
    Travelers
    TRV,
    -4.17%    ,
    and Caterpillar
    CAT,
    -1.69%    .
    A $1 move in any one of the 30 components of the index equates to a 6.59-point swing.

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  • U.S. industrial output was flat in February

    U.S. industrial output was flat in February

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    The numbers: U.S. industrial production was flat in February, the Federal Reserve reported Friday.

    The unchanged reading was in line with economists expectations, according to a survey by The Wall Street Journal.

    Output rose a revised 0.3% in January, revised up from the initial estimate of a flat reading, but there were deep declines in November and December.

    Key details: Manufacturing output downshifted to a slim 0.1% rise in February after a strong 1% gain in the prior month. 

    Motor vehicles and parts output fell 0.3% after a 0.6% jump in January. Excluding autos, total industrial output was unchanged.

    Utilities output rose 0.5% in February. Mining output, which includes oil and natural gas, fell 0.6% after a 2% gain in the prior month.

    Big picture: The softness in manufacturing is expected to continue as interest rates have moved higher. Credit conditions are expected to tighten in the wake of the worries surrounding regional banks.

    Market reaction: Stocks
    DJIA,
    -0.95%

    SPX,
    -0.63%
    were set to open lower on Friday. The yield on the 10-year Treasury note
    TMUBMUSD10Y,
    3.449%
    fell to 3.47%.

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  • First Republic gets $30 billion in deposits from 11 major U.S. banks, but stock resumes slide as it suspends dividend

    First Republic gets $30 billion in deposits from 11 major U.S. banks, but stock resumes slide as it suspends dividend

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    Bank of America BAC, Citigroup C, JPMorgan Chase JPM and Wells Fargo WFC said Thursday that they are each making $5 billion in uninsured deposits into First Republic Bank FRC as part of a $30 billion backstop by 11 banks against the ravaged banking landscape of the past week.

    However, First Republic stock fell 14.7% in after-hours trading after the bank said it would suspend its dividend to conserve cash. The bank last paid a quarterly dividend of 27 cents a share on Feb. 9 to shareholders of record as of Jan. 26.

    It…

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  • Mortgage rates fall in latest week. Freddie Mac cites worries over bank closures, and turmoil in financial markets

    Mortgage rates fall in latest week. Freddie Mac cites worries over bank closures, and turmoil in financial markets

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    The numbers: Mortgage rates are down for the first time in six weeks, as the U.S. economy deals with bank collapses and an uncertain road ahead.

    The 30-year fixed-rate mortgage averaged 6.60% as of March 16, according to data released by Freddie Mac FMCC on Thursday. 

    That’s down 13 basis points from the previous week — one basis point is…

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  • U.S. bank stocks end with solid gains as 11 banks pledge $30 billon to First Republic

    U.S. bank stocks end with solid gains as 11 banks pledge $30 billon to First Republic

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    U.S. bank stocks ended regular trading with solid gains on Thursday, as banks announced a $30 billion deposit capital infusion for First Republic Bank and as Treasury Secretary Janet Yellen cited the strength of the financial system.

    The 11 banks confirmed a report from the Wall Street Journal and others about providing financial support for First Republic Bank FRC.

    U.S….

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  • Credit Suisse shares jump after saying it will borrow from SNB and buy back debt

    Credit Suisse shares jump after saying it will borrow from SNB and buy back debt

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    Credit Suisse shares surged 32% in opening trade, rallying as the Swiss banking giant said it will tap its central bank for 50 billion francs ($54 billion) and launching an offer to buy beaten-up debt.

    While the stock CH:CSGN CS did get halted for volatility and came off those highs, it demonstrated that the action helped stave off some of the pressures building around the bank, which has lost money for five consecutive quarters.

    Other…

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  • Credit Suisse to borrow about $54 billion from Swiss central bank

    Credit Suisse to borrow about $54 billion from Swiss central bank

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    Credit Suisse announced late Wednesday it was taking “decisive action” and borrowing up to 50 billion Swiss francs — about $54 billion — to ease investors’ fears.

    The move comes as Credit Suisse stock CS plunged Wednesday to an all-time low, sparking new fears of a global banking crisis.

    Read more: Here’s why a failure of Credit Suisse matters…

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  • Swiss National Bank to provide liquidity to Credit Suisse ‘if necessary’

    Swiss National Bank to provide liquidity to Credit Suisse ‘if necessary’

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    The Swiss National Bank will provide liquidity to troubled lender Credit Suisse if necessary, the central bank said late Wednesday, in a joint statement with the Swiss Financial Market Supervisory Authority, or FINMA. The “problems of certain banks in the USA do not pose a direct risk of contagion for the Swiss financial markets,” SNB and FINMA said. “The strict capital and liquidity requirements applicable to Swiss financial institutions ensure their stability. Credit Suisse meets the capital and liquidity requirements imposed on systemically important banks. If necessary, the SNB will provide CS with liquidity,” they…

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  • Stocks trim losses after report Credit Suisse, Swiss authorities hold talks

    Stocks trim losses after report Credit Suisse, Swiss authorities hold talks

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    U.S. stocks trimmed sharp losses Wednesday afternoon following a report that Swiss authorities and Credit Suisse held talks aimed at stabilizing the troubled lender. Bloomberg, citing people familiar with the matter, said CS leaders and government officials have discussed options that ranged from a public statement of support to a potential liquidity backstop. Ideas also discussed included a spinoff of the Swiss unit or a tieup with rival UBS Group AG, the report said, adding that people involved cautioned it was unclear what, if any, measures would be executed. The Dow Jones Industrial Average DJIA, was off 331 points,…

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  • First Republic stock’s soars a record 58%, but recovers only about one-fifth what it lost the past 3 days

    First Republic stock’s soars a record 58%, but recovers only about one-fifth what it lost the past 3 days

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    While some of the hardest-hit regional bank stocks are posting record one-day rallies, the gains look a bit less impressive when compared with the beating they took over the previous three sessions. Shares of First Republic Bank FRC rocketed $18.05, or 57.8%, in morning trading Tuesday, which was more than quadruple the percentage of their previous record one-day rally of 12.9% on March 17, 2020. But considering the stock had plummeted $83,79, or 72.9%, over the previous three sessions in the wake of recent bank failures, Tuesday’s bounce has retraced just 21.5% of that selloff. Among other big bouncers, shares of Western…

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  • First Republic and Western Alliance pace big rebound in regional-bank stocks after huge losses

    First Republic and Western Alliance pace big rebound in regional-bank stocks after huge losses

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    Shares of regional banks posted big gains on Tuesday as they regained their footing after huge losses in the previous session, but volatility continued in the sector following the demise of Silicon Valley Bank, Signature Bank and Silvergate Capital in the past week.

    While the rise in some cases is eye-popping, most stocks have yet to recover fully from losses in the past few days. Most stocks are trading well below their levels from a week ago, even with Tuesday’s gains.

    Among…

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