Financial Institutions

[Foxx]

The list

 

[Ann]

SVB files for bankruptcy 

 

[Nouseforaname]

5 minutes ago, Ann said:

SVB files for bankruptcy 

 

Not following her point.

[Alaska Darin]

Someone explain to me how this isn't just another political takeover on the march to socialism.

 

 

[Foxx]

3 hours ago, Alaska Darin said:

Someone explain to me how this isn't just another political takeover on the march to socialism.

 

 

Smaller banks are going to become extinct and we will end up with 5 or 6 behemoths.

[Foxx]

The flight from the defacto nationalized Credit Suisse continues. They have offered a premium of 6.5% for deposits of $5mm or above for three months and 7% for those that remain for a year, but apparently that is not enough to soothe fears.

 

Credit Suisse Got Its Lifeline. Now It Needs to Win Back Clients

Quote

The $54 billion lifeline won by Credit Suisse Group AG on Thursday gives it a fighting chance to rebuild its business. Some clients aren’t waiting around to find out how that goes.

 

In Asia, several ultra-wealthy clients continued to cut back their exposure amid the tumult this week. In the Middle East, some customers asked the bank to convert cash deposits into treasury bills and bonds. And in Germany, a wealth manager received inquiries from Credit Suisse clients looking to shift deposits to his firm.

 

Such attrition, if widespread, will make the overhaul that Chief Executive Officer Ulrich Koerner and his team are overseeing that much harder. Stemming the months-long exit of clients is critical to righting the battered Swiss bank, which saw net outflows hit 110.5 billion francs ($119 billion) in the fourth quarter. ...

 

[snafu]

21 hours ago, Nouseforaname said:

Roubini is dr doom for a reason.   He’s effectively joe in a game day thread.

 

 

Did you know that Roubini is a massive NY Jets fan?

Maybe that's what makes him Dr. Doom.

 

[Alaska Darin]

Time to load up on crypto.

 

 

[Nouseforaname]

50 minutes ago, snafu said:

 

Did you know that Roubini is a massive NY Jets fan?

Maybe that's what makes him Dr. Doom.

 

 

I'd hate for him to be my doctor.

 

 

[Foxx]

Outright nationalized by Monday?

Exclusive: Credit Suisse to hold internal talks this weekend on scenarios for bank -sources

Quote

... Among possible scenarios, analysts, bankers and investors speculate that Credit Suisse could sell or wind down some of its existing businesses with a break-up potentially on the cards.

 

A more decisive solution could be an outright takeover by a rival. ...

 

 

Banks starting a bank run? 

Exclusive: Some Credit Suisse counterparties curb dealings as bank heads into scenario meetings -sources

Quote

... Another source at a major global bank, who deals directly with Credit Suisse in Asia, said their bank had started asking the Swiss lender to gross settle, a trading scenario where the counterparty demands up-front payment instead of collecting any money that might be due as a result of a trade later.

 

Another global bank has reduced its unsecured exposure to Credit Suisse, which includes all lending with no collateral, according to a person with knowledge of the matter. The bank is still providing repurchase agreements, which is secured lending.

 

In Asia, a mid-sized Chinese brokerage which was previously trading bonds and entering derivatives contracts with Credit Suisse, on Friday stopped assuming counterparty risk with the Swiss lender, according to a person with knowledge of the matter. ...

...and they tell you not to panic.

Yeah, okay.

[Foxx]

If you're at all familiar with the Icelandic situation, it did work.

 

The '08 crisis actually began in Iceland.

[Nouseforaname]

 

Live look at ubs after consuming crédit suisse.

[Foxx]

14 hours ago, Nouseforaname said:

 

Live look at ubs after consuming crédit suisse.

 

UBS in talks to acquire Credit Suisse

Quote

...UBS has a market value of $56.6bn, while shares in Credit Suisse closed on Friday with a value of $8bn.

 

Swiss regulators told their US and UK counterparts on Friday evening that merging the two banks was their “plan A” to arrest a collapse in confidence in Credit Suisse, a person familiar with those discussions told the FT....

 

...UBS is also analysing the potential risks a deal could have for its own business. ...

 

[Foxx]

BlackRock a suitor?

BlackRock denies report that it’s preparing a takeover bid for Credit Suisse

[Foxx]

Precariously teetering on the edge of the abyss

 

[Nouseforaname]

1 hour ago, Foxx said:

Precariously teetering on the edge of the abyss

 

It is crucial to note a significant limitation in this research. The study does not consider hedging strategies. These strategies may safeguard numerous banks against rising interest rates.

 

WSJ?

Edited March 18, 2023 by Nouseforaname

[Foxx]

1 hour ago, Nouseforaname said:

It is crucial to note a significant limitation in this research. The study does not consider hedging strategies. These strategies may safeguard numerous banks against rising interest rates.

 

WSJ?

 

I don't know that hedging would protect a bank from a run.

 

The article:

Dozens of Banks May Have Risks Similar to Silicon Valley Bank, Economists Find

Quote

... The economists also examined the proportion of banks' funding that comes from uninsured depositors, or accounts with more than $250,000. They estimated that there are 186 U.S. banks where, if half of uninsured depositors quickly withdrew their funds, even insured depositors could face impairments because the bank wouldn't have enough assets to make all depositors whole, potentially forcing the FDIC to step in. ...

 

The abstract the article was based upon:

 

Monetary Tightening and U.S. Bank Fragility in 2023: Mark-to-Market Losses and Uninsured Depositor Runs?

 

[Foxx]

UBS seeking a full and complete backstop from the central bank if they were to acquire Credit Suisse.

 

UBS seeks Swiss backstop in any Credit Suisse deal - Bloomberg News

Quote

... UBS is discussing scenarios in which the government would take on certain legal costs or other specific losses in any deal, the report said, citing people with knowledge of the matter. ...

 

[Nouseforaname]

2 hours ago, Foxx said:

 

I don't know that hedging would protect a bank from a run.

 

The article:

Dozens of Banks May Have Risks Similar to Silicon Valley Bank, Economists Find

 

The abstract the article was based upon:

 

Monetary Tightening and U.S. Bank Fragility in 2023: Mark-to-Market Losses and Uninsured Depositor Runs?

 

Depends, what causes a bank to run? Losses and lack of confidence.  If the losses are hedged, then there should be confidence.

 

[snafu]

6 hours ago, Foxx said:

Precariously teetering on the edge of the abyss

 

See, if people don’t make a run, then there’s no real vulnerability.  Yes, banks are vulnerable from people acting like stupid, panicky sheep way too often. They’ve always been vulnerable to that.