The shares of several U.S. banks fell on Monday following the collapse of Silicon Valley Bank and Signature Bank.
Shares of First Republic Bank fell more than 60% on Monday, while Charles Schwab fell 11%, Western Alliance Bancorp lost more than 47%, and PacWest Bancorp fell 45%. Trading in some of these banks was halted repeatedly for volatility throughout the day.
Markets were still on edge on Monday after financial regulators shut down SVB on Friday and Signature on Sunday.
- The U.S. Treasury designated both SVB and Signature as systemic risks, giving it authority to unwind both firms in a way that protects all depositors.
- The Federal Reserve also created a new Bank Term Funding Program that will offer loans for up to a year to banks in return for high-quality collateral like Treasurys, agency debt, and mortgage-backed securities.
- The program aims to safeguard banks impacted by the market volatility caused by SVB’s collapse.
- On Sunday, First Republic Bank said it received additional liquidity from the Federal Reserve and JPMorgan Chase.
