After the failure of two regional US banks, Silicon Valley Bank and Signature Bank, most Asian markets fell on Monday, even as officials vowed to protect the US economy by strengthening public confidence in the country’s banking system.
The collapse on Friday of Silicon Valley Bank, which specialises in venture-capital financing largely in the tech sector, came after a huge run on deposits left it unable to stay afloat on its own. On Sunday, New York regulators said they had closed another lender, Signature Bank.
Top updates on Silicon Valley Bank and Signature Bank collapse:
1. The US government took extraordinary steps on Sunday to stop a potential banking crisis after the historic failure of Silicon Valley Bank, assuring all depositors at the failed institution that they could access all their money quickly, even as another major bank, Signature Bank, was shut down.
2. In a sign of how fast the financial bleeding was occurring, regulators announced that New York-based Signature Bank had also failed and was being seized on Sunday. At more than $110 billion in assets, Signature Bank is the third-largest bank failure in US history. SVB is the largest retail bank to fail since the 2008 financial crisis.
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3. US President Joe Biden vowed to hold “fully accountable” the people responsible for “this mess” and said he would deliver remarks on Monday morning on maintaining a resilient banking system.
4. US bank shares plunged on Friday, and Asian lenders extended their own losses, with HSBC, National Australia Bank and Mitsubishi UFJ Financial Group all well down on Monday.
5. Its problems had built up as the US Federal Reserve’s year-long interest rate hikes meant securities it owned were selling for significantly less — a problem that other banks could face.
6. Regulators had to rush to close Silicon Valley Bank, a financial institution with more than $200 billion in assets, on Friday when it experienced a traditional run on the bank where depositors rushed to withdraw their funds all at once.
7. The failure of SVB Financial Group’s Silicon Valley Bank, Silvergate Capital Corp. and Signature Bank has set off a fresh set of stresses for the digital-asset market. The failure triggered a knock-on effect in the crucial market for stablecoins after digital-asset giant Circle Internet Financial Corp., one of the biggest issuers of the widely used tokens known for their perceived safety, revealed it had $3.3 billion of reserves with the bank.
8. Gold kept rising in Asia — after jumping 2% on Friday — as investors flocked to havens following the collapse of a US bank.
9. The US dollar slid on Monday as authorities stepped in to cap the fallout from the sudden collapse of Silicon Valley Bank. The euro was up 0.44% to $1.069, while sterling was last trading at $1.2085, up 0.47% on the day. The Australian dollar rose 0.79% to $0.663, while the kiwi rose 0.36% to $0.616. In cryptocurrencies, bitcoin last rose 11.12% to $22,330.00. Ethereum last rose 12.12% to $1,598.90.
10. In India, the equity market opened on a strong note on Monday, with benchmark index Sensex jumping 344 points amid positive investor sentiments and mixed global cues.
(With inputs from agencies)