© Reuters. Customers wait in line outside a branch of the Silicon Valley Bank in Wellesley, Massachusetts, U.S., March 13, 2023. REUTERS/Brian Snyder
(Reuters) – European Central Bank supervisors see no contagion for euro zone banks from recent sector turmoil, a source said on Friday, even as rescue deals for Credit Suisse and First Republic Bank (NYSE:) failed to arrest pressure on their share prices.
Shortly after embattled Credit Suisse secured an emergency central bank loan of up to $54 billion on Thursday, big U.S. banks swooped in with a $30 billion lifeline for San Francisco-based First Republic, which has been under scrutiny since the collapse of two other mid-size U.S. banks.
DEVELOPMENTS
* First Republic Bank received $30 billion in deposits from several big banks as part of a rescue package but its shares were still 20% lower in early trade on Friday.
* Banks sought record amounts of emergency liquidity from the Federal Reserve in the wake of the failure of Silicon Valley Bank (SVB) and Signature Bank (NASDAQ:), Fed data showed on Thursday.
* SVB Financial Group filed for a court-supervised reorganization under Chapter 11 bankruptcy protection to seek buyers for its assets days after former unit SVB was taken over by U.S. regulators.
* Credit Suisse shares resumed their decline on Friday, while more than $450 million in net outflows left the bank’s U.S. and European managed funds between March 13-15, according to Morningstar Direct.
* ECB supervisors meeting on Friday saw no contagion to euro zone banks from the market turmoil that has engulfed Credit Suisse and some U.S. banks, a source said.
* The ECB’s decision to raise interest rates on Thursday signals strong confidence in the solidity of European banks, French ECB policymaker Francois Villeroy de Galhau said.
* China’s central bank will cut the amount of cash that banks must hold as reserves for the first time this year to release liquidity and support the economy.
* Japan’s government must work closely with the central bank and overseas authorities in the wake of banking problems in the West, Japan’s top financial diplomat said on Friday, adding that the Japanese economy was stable.
MARKETS
* European and U.S. shares fell on Friday after an early recovery ran out of steam as investor sentiment remained fragile after a week of turbulence. The U.S. dollar slipped.
* Banking worries send U.S. markets on dizzying ride.
