This is not another banking crisis, analysts say — it's 'sentiment contagion' instead

In this article .BBKA Follow your favorite stocks CREATE FREE ACCOUNT A slogan is written on the sidewalk in front of the global headquarters of Swiss bank Credit Suisse the day after its shares dropped approximately 30% on March 16, 2023 in Zurich, Switzerland. Arnd Wiegmann | Getty Images News | Getty Images The collapse of U.S.-based Silicon Valley Bank, the biggest bank failure since the global financial crisis, and the emergency rescue of Credit Suisse by Swiss rival UBS , sparked a sell-off in banking stocks as contagion fears spread. Deutsche Bank was the next target, with shares plunging and the cost of insuring against its default spiking at the end of last week — despite the German lender's strong capital and liquidity positions. related investing news 'Sell into rallies': Morgan Stanley names the stocks to navigate current European banking jitters Ganesh Rao a day ago The market panic appeared to subside Monday after First Citizens agreed to buy a large chunk o

Fed's Barr calls Silicon Valley Bank failure a 'textbook case of mismanagement'

Michael Barr, vice chair for supervision of the Board of Governors of the US Federal Reserve, during a Fed Listens event in Washington, D.C., on Friday, Sept. 23, 2022. Al Drago | Bloomberg | Getty Images The Federal Reserve's top banking regulator said Monday that the failure of the Silicon Valley Bank was due largely to mis manage ment, though he noted that regulation and oversight also need to step up. Fed Governor Michael Barr, the central bank's vice chair for supervision, insisted in prepared remarks to two congressional panels that regulators had noted issues with SVB's risk manage ment, but the bank was too slow to respond. "To begin, SVB's failure is a textbook case of mismanagement," he said. "The bank waited too long to address its problems, and ironically, the overdue actions it finally took to strengthen its balance sheet sparked the uninsured depositor run that led to the bank's failure." Barr is to address the Senate Banking Commi

First Citizens to buy large chunk of failed Silicon Valley Bank

Photo illustration, the Silicon Valley Bank logo is visible on a smartphone, with the stock market index in the background on the personal computer on March 14, 2023, in Rome, Italy. Andrea Ronchini | Nurphoto | Getty Images First Citizens Bank & Trust Co will buy Silicon Valley Bank's deposits and loans, the U.S. Federal Deposit Insurance Corporation said Monday, just over two weeks after the biggest U.S. banking collapse since Lehman Brothers. The deal includes the purchase of approximately $72 billion of SVB assets at a discount of $16.5 billion, but around $90 billion in securities and other assets will remain "in receivership for disposition by the FDIC." related investing news 'Sell into rallies': Morgan Stanley names the stocks to navigate current European banking jitters Ganesh Rao 5 hours ago "In addition, the FDIC received equity appreciation rights in First Citizens BancShares, Inc., Raleigh, North Carolina, common stock with a potential value

Capitol Police weren't told Republicans would turn Jan. 6 footage over to Tucker Carlson

WASHINGTON — U.S. Capitol Police officials were not told that the surveillance video of the Jan. 6 attack on the Capitol, which they gave to House Republicans, would be passed on to Fox News host Tucker Carlson, the department's top lawyer said in a sworn court filing. In a declaration filed Friday in Washington federal court, Capitol Police general counsel Thomas DiBiase said police found out from a media report on Feb. 20 that Carlson's staff were reviewing thousands of hours of footage from the day of the riot that had not been made public at the time. The Republican-led Committee on House Administration had requested access to the footage from Capitol police just 12 days earlier, according to DiBiase in the filing, first reported by Politico. Demonstrators clash with U.S. Capitol police officers while trying to enter the Capitol building during a protest on Jan. 6, 2021. Victor J. Blue / Bloomberg via Getty Images file DiBiase said he was told that "personnel from th

Unusual lending practices at Silicon Valley Bank contributed to the bank's woes

The full picture of why Silicon Valley Bank failed so spectacularly and so fast has not yet come into focus. But uncommon lending practices at the cutting-edge lender contributed to its woes and raise questions about risk management by its executives and board, analysts said. These lending practices may also explain why there has been no merger of the institution with a healthier bank as typically occurs when the Federal Deposit Insurance Corp. steps in as it did with Silicon Valley Bank last week. For example, of the roughly $74 billion in total loans Silicon Valley Bank held on its books at year-end, almost half — $34 billion — went to borrowers who used the money to buy or carry securities of their own, regulatory data shows. Other lenders make such loans but in far smaller amounts, filings show.  For now, things have calmed down at the bank following an extraordinary move by the federal government to guarantee all its deposits, even those over the usual FDIC limit of $250,000

Deposit drain from smaller banks into financial giants like JPMorgan Chase has slowed, sources say

First Republic Bank headquarters is seen on March 16, 2023 in San Francisco, California, United States. Tayfun Coskun | Anadolu Agency | Getty Images The surge of deposits moving from smaller banks to big institutions including JPMorgan Chase and Wells Fargo amid fears over the stability of regional lenders has slowed to a trickle in recent days, CNBC has learned. Uncertainty caused by the collapse of Silicon Valley Bank earlier this month triggered outflows and plunging share prices at peers including First Republic and PacWest. The situation, which roiled markets globally and forced U.S. regulators to intervene to protect bank customers, began improving around March 16, according to people with knowledge of inflows at top institutions. That's when 11 of the biggest American banks banded together to inject $30 billion into First Republic, essentially returning some of the deposits they'd gained recently. "The people who panicked got out right away," said the perso

DCG-owned crypto exchange Luno replaces CEO, seeks outside investment after layoffs

DCG, Luno's parent company, has been grappling with the ongoing fallout from last year's plunge in token prices and the collapse of FTX. Rafael Henrique | Sopa Images | Lightrocket via Getty Images LONDON — The CEO of crypto currency exchange Luno is stepping aside and handing the reins to its head of operations, the company announced Wednesday. It comes as Luno's parent company, crypto -focused venture capital firm Digital Currency Group, continues to reel from turmoil in the crypto market. Luno also recently laid off 35% of its global workforce. related investing news Here are Morgan Stanley's favorite quality stocks to buy as bear market nears end Michelle Fox 18 hours ago Marcus Swanepoel, a South African former banker who founded Luno in 2013 with the aim of bringing crypto to the masses, will give up his CEO title after 10 years to become executive chairman, the company said in a press release Wednesday. James Lanigan, Luno's chief operating officer, will