Banks in Turmoil

They’re letting depositors know that their money is safe and highlighting differences between their banks and the ones that failed.

The bank, much larger than SVB, found problems in its financial reporting. Its Saudi funders ended support, but Swiss officials may step in.

The failure of Silicon Valley Bank and Signature Bank has put a spotlight on the stability of regional banks.

One of the many questions around the two recent U.S. bank failures is why depositors became so spooked even when their bank held supposedly-safe assets like Treasury bonds. The answer, says Susan Schmidt, is largely because of those bonds’ decreased value because of higher interest rates. Credit Suisse, one of the world’s largest financial institutions, saw its stock nosedive this morning after it revealed it had been audited for shoddy accounting practices. And, a look at why sustainable versions of popular products are finding a growing niche in the market. 

The last few days have been particularly unstable for mortgage rates, which were already volatile amid recent interest rate hikes.

From the BBC World Service: The European Union’s banking regulator says it doesn’t see “any threat to financial stability of European Banks”, following the collapse of SVB. We ask an economics professor at a French business school why European banks are less likely to fail. We spoke to him before Credit Suisse’s shares collapsed after a major shareholder said it would not continue to invest. Also, the UK Government will be hoping for less turmoil as it prepares to announce its budget; the last one led to the pound reaching record lows and cost the then Prime Minister her job. Plus, we report from Beirut where the Lebanese currency is in freefall.

Today, we’ll look at the regulators involved in the banking blowup and chart where they can go from here. Plus, a quarterly report hints at how Federal Reserve policy may unfold.

Regulators didn’t catch Silicon Valley Bank before it failed. What can they do to catch others?

“We’ve just seen an uptick in moral hazard,” Daniel Tarullo says of the U.S. government covering uninsured deposits.

The feds didn’t take possession of Silicon Valley Bank and Signature Bank. That was up to state regulators in California and New York.