The drama of the banking sector continues in the air of SVB, Credit Suisse

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, UBS is said to be exploring a deal with all or part of rival Credit Suisse at the urging of the Swiss National Bank and the country’s financial regulator, the FT reported.

  • A separate report by the publication said that BlackRock was evaluating alternatives to a rival offer, which the US firm denied.
  • Credit Suisse failed to find a bottom for its shares on Friday, two days after it received its own $50 billion bailout from the Swiss National Bank. The stock fell another eight percent in Europe on Friday.

And First Republic Bank investors run…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.

Looking for reasons, President Biden took aim at the executives on Friday and urged Congress to enact tougher penalties for those who oversee failed banks, Axios’ Kate Marino writes.

  • The Fed, meanwhile, said Monday it plans to review whether there were potential regulatory or supervisory failures that led to SVB’s collapse, Axios’ Courtenay Brown writes. Its broad review of the bank’s failure is expected by May 1.

Editor’s note: This story has been updated with additional information from Credit Suisse

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