California banking regulators closed SVB Financial Group, putting the tech-heavy lender into receivership in the largest bank failure since the 2008 financial crisis
as their shares fell. Others such as Germany's Commerzbank CBKG.DE issued unusual statements to reassure investors.in the banking sector and its vulnerability to the rising cost of money.
"There could be a bloodbath next week as banks are in trouble, the short sellers are out there and they are going to attack every single bank, especially the smaller ones," said Christopher Whalen, chairman of Whalen Global Advisors.met with banking regulators on Friday expressed "full confidence" in their abilities to respond to the situation, Treasury said.in U.S. financial regulators, when asked about the failure of SVB.
"The first bank failure since 2020 is a wake-up call," said Matthew Goldberg, an analyst at Bankrate.lies in a rising interest rate environment. As higher interest rates caused the market for initial public offerings to shut down for many startups and made private fundraising more costly, some SVB clients started pulling money out.
To fund the redemptions, SVB sold on Wednesday a $21 billion bond portfolio consisting mostly of U.S. Treasuries, and said it would sell $2.25 billion in common equity and preferred convertible stock to fill its funding hole.this week to reassure its venture capital clients their money was safe. By Friday, the collapsing stock price had made its capital raise untenable and sources said the bank tried to look at other options, including a sale, until regulators stepped in and shut the bank down.
After the FDIC announcement, employees received an email from the company saying they would be contacted by officials about employment and compensation, according to a source who declined be identified. As of Friday evening, there had not been any further communication from the company or the FDIC, the source said.
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