Illustration: Gabriella Turrisi/Axios
The banking sector faces a third week of existential questions and instability despite official efforts to stabilize markets and reassure depositors.
Meanwhile, the search for reasons, doctrines and accusations is already well underway.
What we watch: The fate of Silicon Valley Bank, whose financial fault lines led to the recent banking earthquake, remains up in the air.
- Its former parent filed for bankruptcy protection on Friday. The commercial bank, which was taken over by the US government last week, is not involved in this process.
- Another attempt to sell the FDIC-owned bank is underway after the regulator failed to find a buyer last weekend.
Separately, First Republic Bank investors are running…again. Shares were boosted on Thursday by news of a $30 billion lifeline. But hours later, it announced it was suspending the dividend. The stock cratered another 32 percent on Friday.
- Swiss giant Credit Suisse also failed to find a bottom for its shares two days after it received its own $50 billion lifeline from the Swiss National Bank. The stock fell another eight percent in Europe on Friday.
Looking for reasons, President Biden today set a target for executives, urging Congress to enact tougher penalties for those overseeing failed banks, Axios’ Kate Marino writes.
- The Fed, for its part, said Monday that it plans to review whether any regulatory or supervisory failures led to SVB’s collapse, Axios’ Courtenay Brown writes. Its broad review of the bank’s failure is expected by May 1.