Bank Freakout

Bank-rule pendulum swings back to ‘safety first’

13 Mar 2023

Lenders like failed SVB rode the coat-tails of regulatory changes designed to spare small groups from burdensome red tape. That lighter touch will now be rolled back by top US rulemakers, some of whom always opposed it. Big and small banks face a new wave of rule-making zeal.

The Fed giveth, taketh away, giveth again

13 Mar 2023

The Federal Reserve helped to backstop failed Silicon Valley Bank. But it was the central bank’s easy money, followed by a sharp surge in interest rates, that pushed the lender to the brink. Other dangers for banks lurk. But with inflation high, the Fed is running out of tools.

Bank-run defences could use some reinforcements

13 Mar 2023

Silicon Valley Bank wasn’t subject to requirements that compel most lenders to hold enough liquid assets to meet possible outflows. But the speed with which corporate clients pulled their money suggests those rules need tweaking. Doing nothing raises the risk of a bigger repeat.

Capital Calls: Ritchie Bros founder regret

13 Mar 2023

Concise views on global finance: The industrial equipment auction company’s $7 bln deal for scrap-yard operator IAA has drawn one last opponent: the company’s own co-founder.

Bank rescue buys stability at a high price

12 Mar 2023

Authorities have swooped in to back depositors of the failed Silicon Valley Bank – even those not guaranteed their money back – and open the spigots for other lenders short of cash. That stops the immediate risk of bank runs. But the underlying regulatory failure is clear.

Silicon Valley Bank dies but its disease lives on

10 Mar 2023

The failed tech lender had unique problems. The lion’s share of its deposits were too big to be guaranteed by Uncle Sam, so survival depended on customers staying calm. But by putting the spotlight on these uninsured balances, regulators have created a new reason to be nervous.

Big bank selloff rests on tiny kernel of truth

10 Mar 2023

Shares in JPMorgan, HSBC and others dropped after Silicon Valley Bank raised equity to cover losses on bond sales. That’s not going to happen to large players with more reliable funding. But it’s a reminder that rising interest rates bring risks as well as rewards for lenders.

Capital Calls: SVB found old concentration risk

10 Mar 2023

Concise views on global finance: The busted bank counted half of all U.S. venture capital-backed startups as clients. As with financiers to oil barons in the 1980s, monomaniacal focus on a booming industry is a way to court disaster.

Credit Suisse blunders undermine CEO’s repair job

9 Mar 2023

The bank’s shares fell 5% after a call from US regulators stopped it from publishing its 2022 annual report. The watchdog’s accounting questions seem minor and predate boss Ulrich Körner. But the constant bugs impede his quest to win back lost confidence and wealth assets.