Banking sector drama drags on with SVB and Credit Suisse up in the air

Illustration of a hand holding a bank building.

Illustration: Gabriella Turrisi/Axios

The banking sector is about to enter a third week of existential questions and see-saw volatility, despite official efforts to stabilize markets and reassure depositors.

In the meantime, the search for causes, lessons and reproaches is already well under way.

What we are looking at: The fate of Silicon Valley Bank, whose financial failings caused the recent banking earthquake, is still up in the air.

  • His former relative filed for bankruptcy on Friday. The commercial bank – which was taken over by the US government last week – is not included in this process.
  • A second effort to sell the now FDIC-owned bank is underway, after the regulator was unable to find a buyer last weekend.

Separately, UBS is reportedly exploring a deal for all or part of beleaguered rival Credit Suisse, spurred by the Swiss National Bank and the country’s financial regulator, the FT reports.

  • A separate report from the publication said BlackRock was evaluating options for a competing bid, which the US company denied.
  • Credit Suisse failed to find a floor for its shares on Friday, two days after securing its own $50 billion lifeline from the Swiss National Bank. The title fell another 8% on Friday in Europe.

And the Bank of the First Republic investors are running…again. Stocks were buoyed by the announcement of a $30 billion lifeline on Thursday. But a few hours later, he announced that he was suspending his dividend. The stock cratered another 32% on Friday.

In search of causes President Biden set a goal for leaders on Friday, calling on Congress to pass tougher penalties for those who oversee failing banks, writes Axios’ Kate Marino.

  • The Fed, meanwhile, said on Monday it intended to examine whether there were any regulatory or supervisory missteps leading to SVB’s collapse, writes Courtenay Brown of Axios. His general review of the bank’s failure is expected by May 1.

Editor’s Note: This story has been updated with additional information about Credit Suisse

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