Banks went through a price rollercoaster over the weekend and on March 13. Dozens of regional US banks temporarily stopped operating amid volatility and falling prices.
The Wall Street Journal reported earlier this morning that First Republic Bank, which led banks in losses when its share price fell 65% at the time trading was halted, had been halted. The listing of PacWest Bancorp was also halted, down 25%; Zions Bancorp, which is down 25%; and Regions Financial, which was down 9%.
When trading resumed, the recovery for these banks was mixed: Regions Financial and Zions Bancorp rallied, while the others rose slightly.
Other banks were also trading lower. Fox News noted that KeyCorp was down 29.02% Huntington Bancshares was down 18.96% at midday on the US East Coast. Charles Schwab was down 9.5% after the halt and resumption of trading.
We have to say it: please don’t root for a run on the banks and systemic collapse. You have no idea the consequences for your life, regardless of how insulated you believe you are.
— Autism Capital (@AutismCapital) March 12, 2023
We have to say it: please do not support a run on the bank and a systemic collapse. You have no idea of the consequences for your life, no matter how isolated you think you are.
The larger banks posted smaller losses. Citigroup was down 7.3% at press time and JPMorgan Chase, 1.3%. At the same time, the S&P 500 index, the Dow and the Nasdaq rose slightly. Bitcoin (BTC) rose 13.3%.
US President Joe Biden made a brief statement on the economy just before the markets opened on March 13, saying:
“The United States can trust that the banking system is safe. Their deposits will be there when they need them. […] Taxpayers will suffer no loss.”
Biden also said that the managers of the banks intervened by the FDIC would be fired and that those responsible for bank failures would be prosecuted. However, investors in the failing banks would not be protected. “Knowingly assumed a risk […] This is how capitalism works,” the president said.
The banking crisis may affect the cryptocurrency sector even after prices stabilize, as failed banks Silvergate and Signature were cryptocurrency friendly, unlike many traditional banks.
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