Helping to share the web since 1996


US Banking Crisis sends Shockwaves through Global Markets

The US banking industry is grappling with a crisis as banks struggle to stay afloat amid rising interest rates and self-inflicted wounds. After a run on deposits by spooked customers, Silicon Valley Bank (SVB), a lender to the tech industry, collapsed last Friday, leading regulators to take control. Following this, a second regional bank, Signature Bank, was shut down, while First Republic Bank was on the brink of collapse.

Credit Suisse, a global bank, was also facing a major threat, but was temporarily averted by Swiss authorities announcing a backstop for the bank. However, the calm was only restored thanks to emergency cash from central banks and industry players.

Nearly $200bn in direct central bank support has been required so far, with the Fed agreeing to loans of nearly $153bn to other banks in recent days. The banking industry is also coughing up billions to help, with JPMorgan Chase, Bank of America and Citigroup among 11 lenders providing a $30bn cash infusion aimed at shoring up confidence in First Republic Bank.

The crisis is likely to make loans harder to come by, as banks will pay much greater attention to the creditworthiness of borrowers, which could make credit less available and more expensive.

«

»

Back to news headlines