A former White House adviser described it as the “tip of the iceberg” as the US banking industry lost $100BN in a single day. The Big Four were affected by the SVB collapse contagion, and regional banks fell by up to 60% during the bloodbath on Wall Street.
More than $100 billion was wiped off US banks’ value today in a bloodbath on Wall Street sparked by the collapse of Silicon Valley Bank.
Trading was intermittently halted on at least 20 regional banks as the velocity of money forced regulators to intervene. The Big Four of US banks were also drawn into the bloodletting. Citigroup’s share price dived 7.45 percent, Wells Fargo sank 7.1 percent, Bank of America plunged 5.8 percent and JP Morgan fell 1.8 percent.
Among the worst affected regional banks were First Republic which fell by 62 percent, Western Alliance which closed with a loss of 47 percent and KeyCorp which dropped by 21 percent.
The declines struck the Street despite Joe Biden making an intervention minutes before the market opened to claim that ‘Americans can have confidence that the banking system is safe’.
Former Trump White House adviser Steve Moore warned that SVB ‘may just be the tip of the iceberg’, exposing a broader weakness brought about by Biden’s $4trillion COVID stimulus package.
SVB’s sudden collapse Friday – the second-largest ever by a US bank – struck when investors frantically started withdrawing funds amid fears it could no longer keep pace with the Fed’s rate hikes.
Moore told Fox News: ‘I think it’s important for people to understand how this potential banking crisis happened. It’s not because there aren’t enough bank regulators, as Biden is trying to say.
‘It’s because of the massive inflation and the trillions and trillions of dollars of borrowing that the federal government has done that has put our financial system in great jeopardy and great peril.
‘You can’t just keep doing this month after month, year after year, borrowing trillions and trillions of dollars. And so what happened, because of the Biden spending and debt policies, is that not only did inflation go up, but interest rates have gone up.’
He said the Fed had already raised interest rates multiple times throughout 2022 and has signaled that intends to continue doing so to cool the overheated economy.
In a tweet, a 116-year-old Mumbai bank called SVC Bank, which was in trouble after SVB’s collapse clarified that it had no relation to SVB.
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