Banks loss sharing

Chairman Thomas Jordan of the Swiss National Bank (SNB) attends a news conference in Zurich, Switzerland, March 23, 2023. REUTERS/Denis Balibouse ZURICH  -The Swiss National Bank raised its benchmark interest rate by 50 basis points on Thursday and declared that measures to support Credit Suisse had “put a halt to the crisis”. The central bank said that additional rate rises could not be ruled out and that it was willing to be active in the foreign exchange market if necessary. “The measures announced at the weekend … have put a halt to the crisis,” it said in a statement. “The SNB is providing large amounts of liquidity assistance in Swiss francs and foreign currencies.” The rates increase was the SNB’s fourth hike in succession as the central bank maintained its fight against Swiss inflation, which remains stubbornly outside the SNB’s target band of 0 -2 percent. “The growth outlook for the global economy in the coming quarters remains subdued,” said the SNB in a … [Read more...] about Swiss National Bank raises rates, says bank crisis stopped

Key Takeaways U.S. equities indexes fell on March 22, 2023, as the Fed hiked interest rates even though markets remained concerned about issues in the banking sector. The Dow, Nasdaq, and S&P 500 all posted losses of approximately 1.6% during Wednesday's session. Bank stocks saw significant declines, with First Republic (FRC) turning in the worst performance among S&P 500 stocks on uneasiness about its risk of failure. U.S. equities sank after the Federal Reserve raised interest rates another 25 basis points (bps) in its effort to bring down inflation. The decision came despite expectations by some that policymakers might pause hikes because of concerns about the banking sector in the aftermath of the collapse of Silicon Valley Bank and Signature Bank. Fed Chair Jerome Powell noted that the banking stress will likely cause tighter credit conditions that will impact the economy. The Dow, S&P 500, and Nasdaq all dropped about 1.6%. Bank stocks tumbled, … [Read more...] about Markets Dip as Fed Raises Rates Despite Banking Concerns

Key Takeaways U.S. stocks posted gains on March 16, with an industry bailout for First Republic Bank (FRC) and positivity around tech stocks sending markets higher. The tech-heavy Nasdaq added nearly 2.5% in Thursday's session, while the S&P 500 and the Dow advanced around 1.8% and 1.2%, respectively. Semiconductor stocks contributed to the gains in the tech sector, with Intel (INTC) leading the Dow higher following an analyst upgrade. U.S. equities jumped on an industry bailout of struggling First Republic Bank ( FRC ) and on enthusiasm for semiconductor and other tech stocks. The Dow and S&P 500 rose more than 1%, and the Nasdaq popped 2.5%. First Republic was the best-performing stock in the S&P 500, bouncing back from big losses earlier in the day after several major banks pledged $30 billion to prop up the ailing financial institution. Shares of Comerica ( CMA ), Regions Financial ( RF ), and other regional banks increased. However, American … [Read more...] about Markets Gain on First Republic Bank Aid, Tech Enthusiasm

Share to Twitter Share to Linkedin In what should go down as one of the all-time greatest propaganda campaigns in U.S. history, members of Congress convinced millions of Americans that deregulation caused the 2008 financial crisis. Following the collapse of Silicon Valley Bank, they’re at it again. Predictably, populists such as Senator Elizabeth Warren (D-MA) are blaming the SVB failure on “rolling back” the 2010 Dodd-Frank Act’s stricter oversight. Aside from whether Dodd-Frank regulations were effective at all or amounted to anything more than additional paperwork and higher capital requirements, Congress has never repealed a single Title of Dodd-Frank. Warren’s argument amounts to whether additional stress testing, capital, or liquidity would have saved SVB. But Dodd-Frank stress tests are designed to ensure sufficient capital to cover losses resulting from “adverse economic conditions,” not from individual mistakes or bad strategies. Separately, … [Read more...] about SVB Debacle Brings The Fed One Step Closer To Becoming Provider Of First Resort

Share to Twitter Share to Linkedin U.S. Bancorp’s stock (NYSE: USB) has lost approximately 14% YTD as compared to the 4% rise in the S&P500 index over the same period. Further, the recent volatility in the stock price (down 20% over the last ten days) was due to the turmoil in the banking sector. Notably, the collapse of the Silicon Valley Bank, Signature Bank, and the Credit Suisse crisis has made investors cautious about banking stocks. Overall, USB is trading at the current price of $38 per share, which is 32% below its fair value of $55 – Trefis’ estimate for U.S. Bancorp’s valuation . The bank posted mixed results in the fourth quarter of 2022, with earnings beating the estimates but revenues missing the mark. It reported total revenues of $6.4 billion – up 12% y-o-y, primarily driven by a 37% jump in the net interest income, partially offset by a 19% decline in the non-interest revenues. While the NII benefited from the improvement in … [Read more...] about U.S. Bancorp Stock Is Undervalued