First Republic Bank: Wall St pledges billions to rescue California lender as Credit Suisse was lifted by liquidity line – latest

Let’s start with the good that came out of the collapse of Silicon Valley Bank, which controlled about a quarter of companies in the UK tech sector and was threatening to collapse.

The UK branch has been bailed out via a deal struck this weekend by the Bank of England, the government and HSBC – the bank picking up the pieces after “a competitive process” and (we’re told) sparing the taxpayer a nasty blow in the process.

There’s something reassuringly old-fashioned about the way this was brokered behind closed doors. The end result is that the company will be moved to HSBC UK, meaning depositors can get their money and technicians get their pay.

The technology and start-up-focused lender based in Santa Clara, California, was taken over by regulators on Friday during a run on its deposits that made it the second largest bank failure in US history.

Markets stabilized Thursday night in hopes the new lifelines will limit any “contagion” to other banks.

Thomas Kingsley And Alastair Jamieson look what happens.

The collapse of Silicon Valley Bank and Signature Bank has caused some customers to rush to withdraw money from smaller banks, resulting in a windfall in new deposits for larger institutions.

London’s top stocks experienced a rollercoaster session on Thursday, with traders bouncing the FTSE 100 up and down all day, but managed to close on a high despite turbulent trading.

After the index’s worst day in three years on Wednesday amid worries about the future of banking giant Credit Suisse, trading on Thursday was highly erratic.

The top index initially gained ground and looked poised for a rebound when trading opened after Swiss authorities extended a £45bn bailout loan to the beleaguered bank.

But during the day it was tossed around like a yo-yo, even into negative territory at one point. By the end of the day, it was up 0.9%.

It was a matter of foam, rinse, repeat in banking this week, with the collapse of Silicon Valley Bank followed by a much bigger crisis in the form of Credit Suisse.

Medium SVB was systemically more significant than many had assumed, raising major questions about US oversight.

But there was never any doubt about the dangers of a stricken Credit Suisse, a pillar of Swiss banking and a (shaky) member of the top table.

The Massachusetts Democrat and longtime critic of the financial industry made the remarks during a Senate Finance Committee hearing with Treasury Secretary Janet Yellen.

Erik Garcia has the full story.

Major Wall Street indices rallied Thursday on news and confirmation that some of the largest US financial institutions came to the aid of First Republic Bank.

The banks have agreed to deposit $30 billion into First Republic Bank to demonstrate their confidence in the US banking system.

Bank of America, Wells Fargo, Citigroup and JPMorgan Chase will contribute about $5 billion each, while Goldman Sachs and Morgan Stanley will contribute about $2.5 billion, the banks said in a press release.

Truist, PNC, US Bancorp, State Street and Bank of New York Mellon will each deposit approximately $1 billion.

The Dow Jones Industrial Average index rose 371.98 points, or 1.17%, to close at 32,246.55 points. The S&P 500 added 1.76% to close at 3,960.34. The Nasdaq Composite rose 2.48% to 11,717.28.

A group of financial institutions has agreed to deposit $30 billion into First Republic to demonstrate confidence in the US banking system, the banks announced Thursday afternoon.

Bank of America, Wells Fargo, Citigroup and JPMorgan Chase will contribute about $5 billion each, while Goldman Sachs and Morgan Stanley will contribute about $2.5 billion, the banks said in a press release.

Truist, PNC, US Bancorp, State Street and Bank of New York Mellon will each deposit approximately $1 billion.

Stocks in the FTSE 100 regained some of their lost ground on Thursday after a yo-yo session that saw the index fluctuate as much as 130 points between highs and lows.

The bounce-back helped the index soar to 7,410 by the end of the day, up 65.58 points or 0.9% after Swiss authorities agreed an overnight £45bn emergency loan with Credit Suisse.

But it was nowhere near enough to recoup Wednesday’s losses, when the FTSE had its worst trading day in three years – since the early days of the Covid-19 pandemic.