Democrat representative Jeff Jackson explains Silicon Valley Bank collapse
Wall Street rebounded on Tuesday as inflation data met expectations and regional bank shares bounced back after Monday’s sharp falls following the collapse of Silicon Valley Bank (SVB).
Six regional financial institutions remain under tight scrutiny but the response from regulators to protect depositors appears to have addressed market concerns.
Nevertheless, credit ratings firm Moody’s has cut its outlook for the whole of the US banking system to negative from stable “to reflect the rapid deterioration in the operating environment”.
Meanwhile, the US Securities and Exchange Commission and Department of Justice have reportedly opened probes into the failure of SVB and any share trades undertaken by management in the run-up to its shuttering on Friday. A class-action lawsuit has also been filed by investors against the parent company, CEO and CFO.
Tim Mayopoulos, the newly appointed CEO of SVB, has declared the bank is back open for business, opening new accounts and making new loans. He served as CEO of Fannie Mae bringing it back to profitability after the 2008 financial crisis.
Elsewhere, Wall Street expert Robert Kiyosaki, famed for predicting the Lehman Brothers’ failure, has pegged Credit Suisse as the next major bank most likely to collapse.
