4/13/2023 0 Comments What does m and s stand forShares in banks listed on the FTSE 100 also fell – Standard Chartered dropped by 7%, Barclays by 5.5% and HSBC by 4.5% as investors worry about the implications of the purchase of SVB UK.īut the purchase means UK startups will have access to their funds, so they should be able to continue running business as usual. Wells Fargo, Citigroup and Bank of America are down 7.5%, 6% and 7% respectively. Some of the US’s biggest banks have seen their share prices fall following SVB’s collapse. The money will come from fees banks pay into the deposit insurance fund, not from taxpayers as it did in the financial crisis.īut still fears remain that smaller US banks “could become the latest dominos to fall”, added Streeter. US president Joe Biden and Treasury Secretary Janet Yellen have both attempted to calm markets.Īs well as guaranteeing investors’ deposits, the FDIC is offering loan facilities to other banks who hold bonds that have plummeted in value.Ĭrucially under the loans the assets will be valued at the price they were issued, not their current market price, which will help prevent losses. Understandably the news has spooked investors, and raised questions about whether we’re headed for another financial crisis. “This will be hugely welcomed by the government, given the looming crisis risked overshadowing Budget Day, as a big tech sector bailout would not have been a good look when millions have been told there is little extra money to ease the cost-of-living crisis,” Streeter said. “HSBC shareholders may have some concerns about the bank snapping up assets which have been under such a cloud of uncertainty, particularly the exposure to bonds, but HSBC says it expects a gain to arise from the acquisition. This should “end the nightmare thousands of tech firms had been experiencing over the past few days,” says Susannah Streeter, head of money and markets at Hargreaves Lansdown. The Bank of England was planning to put SVB UK into insolvency, but HSBC stepped in to purchase SVB UK for £1. The future of SVB UK was uncertain following the collapse of its parent company, causing concern among the 3,300 companies that bank with it. The FDIC typically guarantees deposits of up to $250,000, but the government has said it will pay out for all deposits.
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