Customers will have access to all deposits, regulators said, while the Fed made it easier for banks to borrow from it in emergencies
Picture: NATHAN FRANDINO/REUTERS
“We think the steps taken by the Fed, Treasury and [the Federal Deposit Insurance Corp, or FDIC] will decisively break the psychological ‘doom loop’ across the regional banking sector,” said Karl Schamotta, chief market strategist at Corpay in Toronto. However, lingering concerns about the financial sector weighed on major banking shares, with HSBC Holdings, Standard Chartered Bank, Japan’s Mitsubishi UFJ and Singapore’s DBS all weaker.
“What investors have to expect coming into tomorrow and beyond is that we are going to be dealing with a lot of event risk,” said Michael Purves, CEO of Tallbacken Capital Advisors. “There are still going to be lingering questions with other regional banks.” Signature, like SVB, had a clientele concentrated in the tech sector, and the securities on its balance sheet had eroded as interest rates rose. By September, almost a quarter of Signature’s deposits came from the cryptocurrency sector, but the bank announced in December that it would shrink its crypto-related deposits by $8bn.
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