(Boursier.com) — The values of regional, small and medium-sized, American banks rebounded sharply on Tuesday, following comments from Janet Yellen assuring the support provided to depositors (but perhaps not to shareholders!). Among the stocks most slaughtered in recent days in the wake of the collapses of SVB and Signature Bank, First Republic climbed 36% on Wall Street today, Western Alliance by 6% and PacWest Bancorp by 15%. New York Community Bancorpwhich has just taken over most of Signature’s assets, is still recovering by 6%. KeyCorp wins 9%. Zions up 7%…
These rebounds therefore come in the hope of broader support for the compartment in the event of further weakness. However, Yellen’s comments aimed at reassuring depositors are unlikely to bring back customers who have left en masse for the big banks JP Morgan, Bank of America, Wells Fargo or Citigroup in recent days.
The United States would consider ways to guarantee all bank deposits if the crisis worsens, according to Bloomberg. The agency quotes people familiar with the matter as saying that Treasury staff are therefore studying how regulators could use emergency authority to temporarily guarantee deposits of more than $250,000 in most accounts. without formal congressional approval. Officials do not consider such action necessary, but are developing a strategy in case the situation worsens. Elon Musk, reacting on Twitter on this subject, is also of the opinion that such a measure is essential to avoid new ‘bank runs’. Previously, activist investor Bill Ackman, who claimed to have no financial interest in the case, stressed the urgent need to guarantee all deposits to avoid contagion…
According to Treasury Secretary Janet Yellen today, the US banking system is stabilizing after actions by regulators, but further measures to protect depositors may be needed if smaller institutions experience drawdowns threatening more contagion. These are Yellen’s prepared remarks for an American Bankers Association conference. Thus, the leader indicated that the government’s measures of the last few days to protect uninsured deposits in two bankrupt banks and to create new liquidity facilities of the Fed had shown the firm commitment to take the necessary measures.
“The actions we took were not intended to help specific banks or classes of banks. Our intervention was necessary to protect the entire US banking system,” Yellen said. She added that she believed the actions of the FDIC, Fed and Treasury had reduced the risk of further bank failures that would have imposed losses on the deposit insurance fund.
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