U.S. banking behemoths attract flood of deposits after SVB collapse -sources
Reuters
Published Mar 14, 2023 01:49PM ET
By Saeed Azhar and Lananh Nguyen
NEW YORK (Reuters) - U.S. consumers have flooded banking giants, including JPMorgan Chase & Co (NYSE:JPM), Bank of America Corp (NYSE:BAC) and Citigroup Inc (NYSE:C) with deposits after the collapse of Silicon Valley Bank, sources familiar with the matter said.
The transfers, which one source said reached billions of dollars, came as investors fretted over the financial health of smaller regional lenders even after receiving assurances from U.S. President Joe Biden and other policymakers.
Large banks saw in influx of money from consumers and businesses in the last week as SVB teetered, one of the sources told Reuters. But the lenders have been careful not to solicit customers from other banks, many of whose stocks have plunged, out of concern that they could accelerate the outflows, two sources said.
The Financial Times reported on the outflows Tuesday, citing several people familiar with the matter.
Rating agency Moody's (NYSE:MCO) Investors Service on Tuesday changed its outlook on the U.S. banking system to negative from stable to reflect the rapid deterioration in the operating environment following deposit runs at Silicon Valley Bank, Silvergate Bank, and Signature Bank (NASDAQ:SBNY).
"Banks with substantial unrealized securities losses and with non-retail and uninsured U.S. depositors may still be more sensitive to depositor competition or ultimate flight," it said.
Moody's said this could have adverse effects on funding, liquidity, earnings and capital.
Shares of U.S. regional banks such as First Republic Bank (NYSE:FRC), Western Alliance (NYSE:WAL) Bancorp and KeyCorp (NYSE:KEY) have slumped on fears of possible bank contagion following the collapse of SVB and Signature Bank.
Those banks recovered some losses on Tuesday. For example shares of First Republic climbed nearly 40 percent after plunging more than 60% on Monday.
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.