Banking Crisis in USA: The financial crisis of America’s First Republic Bank seems to be deepening. The beleaguered bank is seeking to raise money through a private issue of new shares, according to The New York Times, which cited people familiar with the situation. Stocks fell on Friday despite industry-led emergency cash flows, CNN reported, as turmoil in the banking sector continued to rouse Wall Street. According to one of the people who spoke to The New York Times, discussions are on for a complete sale of the bank.
The bank was offered a cash investment of $ 30 billion, but the stock fell
The news comes just 24 hours after First Republic secured $30 billion in cash from a consortium of banks, CNN reported. The Dow Jones closed down 1.2 percent at the end of the week. The S&P 500 ended the week up 1.4 percent. The Nasdaq Composite rose 4.4 percent.
Credit Suisse stock slid nearly 8 percent
CNN reported that First Republic’s shares continued their slide and were down nearly 33 percent, even as a consortium of large banks offered to deposit $30 billion into the troubled bank. Credit Suisse stock slid nearly 8 percent as Wall Street remained concerned about the bank’s ability to recover from this week’s turmoil.
UBS is discussing
Investors are hoping that next week’s Federal Reserve meeting will shed more light on the pace of the economy after a troubled week. Traders see a roughly 63 percent chance for a quarter-point increase, according to the CME Fedwatch tool. The Guardian reported that Swiss banking giant UBS is in discussions to take over all or part of Credit Suisse, a day after the troubled banking giant saw its share price fall despite a $54 billion cash injection.
Financial Times reported
The Financial Times reported that the boards of the two banks are set to meet separately over the weekend in talks initiated by the Swiss National Bank, which provided a lifeline to Credit Suisse. The senior Credit Suisse executive said wealth management clients were leaving the bank. The FT cited unnamed sources as saying the merger between UBS, valued at $56 billion, and Credit Suisse, valued at $7 billion, had a ‘Plan A’ to stem the collapse in confidence.
The Guardian gave information
The Guardian reported that UBS was also reported to be analyzing the potential risks to its own business in taking over its Swiss counterpart. Credit Suisse has said that it is a strong, global bank. “We meet all regulatory requirements and basically overshoot. Our capital, our liquidity base is very strong,” Chief Executive Ulrich Korner said earlier this week.
Credit Suisse stuck in growing banking crisis
Credit Suisse is by far the biggest bank to get caught in the growing banking crisis. On Friday, the parent company of the Silicon Valley bank filed for bankruptcy after worried depositors pulled billions from their accounts, and on Thursday Wall Street’s biggest banks launched a rescue package for San Francisco-based First Republic, which took withdrawals. Was affected by a similar wave. The Guardian reported that the deal initially calmed jittery US investors, but bank shares fell again on Friday as fears grew that the crisis was looming.
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