The crisis in the banking industry was at risk of spreading last night after US President Joe Biden failed to fully reassure financial markets following the collapse of Silicon Valley Bank (SVB).

Shares in US banks plummeted as investors grew concerned that governments and regulators had failed to do enough to stem a crisis of confidence in the sector.

Regional lenders, including California’s First Republic Bank, Arizona’s Western Alliance Bank and Los Angeles-based PacWest, all saw their share prices plunge by more than half.

It came despite President Biden saying he will do “whatever is needed” to protect bank deposits in an attempt to reassure Americans and avert a run on banks.

He added that “Americans can have confidence that the banking system is safe” and called on Congress and regulators to “strengthen rules”.

On Sunday, the US Federal Reserve launched a new lending programme for banks, aimed at ensuring institutions have the “ability to meet the needs of all their depositors”.


However, the Telegraph says the action failed to stem sharp share price declines around the world as investors scrambled to quantify the scale of the crisis.

In Europe, Credit Suisse was being “closely monitored” by the Swiss financial regulator after bets that the company could default on its debts hit a record high.

The cost of buying insurance against Credit Suisse debts soared to record levels.

Swiss financial regulator FINMA was last night tracking developments across its financial sector after the share prices of Credit Suisse and rival UBS fell sharply.

The impact was felt across the European banking sector: Germany's Commerzbank shed 12.7%, while France's Societe Generale and Spain's Sabadell fell 6.2% and 11.4% respectively.

Concerns about Credit Suisse in particular have been mounting in recent months after a series of costly scandals that led to customers to withdraw more than $100billion (£80billion) in the final months of 2022.


Earlier this month, Credit Suisse was forced to delay the publication of its annual report after an 11th-hour query by US regulators on its previous filings.

Andreas Venditti, an analyst at Swiss investment manager Vontobel, said: “In Switzerland it is obvious that Credit Suisse is the weakest link.”

It came as investors predicted that the US Federal Reserve will abandon further interest rate rises in the wake of SVB’s collapse.

Bets on future rate rises in the Eurozone and Britain were also cut.

The Bank of England is now expected to raise rates just one more time to 4.25%, from a current level of 4%. Investors had expected the central bank to raise interest rates to a peak of 4.75% just a week ago.

Goldman Sachs said it no longer expects the Fed to raise rates at its March meeting next week, while Deutsche Bank said SVB's collapse would have far-reaching implications and raised the prospect of a possible US recession.

The Dow Jones index closed yesterday down 0.28% and the S&P 500 slipped 0.15%, while the Nasdaq edged ahead by 0.45%.

FTSE 100

The UK's top share index, the FTSE 100, was down five points at 7,543 shortly after opening this morning, following yesterday's 199-point loss.

Brent crude futures slipped 1.16% at $79.89 a barrel.

Companies reporting today

  • Full-year results: Genuit Group
  • Half-year results: Close Brothers Group
  • Trading update: Pennon Group

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