NEW YORK, March 12 — Some financial industry executives and investors were growing increasingly concerned yesterday that the collapse of Silicon Valley Bank could have a domino effect on other US regional banks if regulators did not find a buyer over the weekend to protect uninsured deposits.
The US Federal Reserve and the FDIC were weighing the creation of a fund that would allow regulators to backstop more deposits at banks that run into trouble, Bloomberg reported. “The good news is it is unlikely an SVB-style bankruptcy will extend to the large banks,” risk and financial advisory firm Kroll said in a research note.
“These withdrawals will drain liquidity from community, regional and other banks and begin the destruction of these important institutions,” Ackman warned. Signature Bank dropped about 23 per cent, while San Francisco-based First Republic Bank fell 15 per cent. Western Alliance Bancorp tumbled 21 per cent and PacWest Bancorp dropped 38 per cent after those stocks were halted several times due to volatility. Charles Schwab Corp slumped more than 11 per cent.
Source: News Formal (newsformal.com)
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