Ashish Ranjan
Silicon Valley Bank Collapse: Silicon Valley Bank and Signature Bank’s failure had a significant impact on global finances, as equities have lost $465 billion in market value since their failure. Investors have questioned whether a government rescue plan for the banking system will prevent further fallout from SVB’s demise, as US counterparts have fallen. Bloomberg reported that Asian lenders have been viewed as more protected from direct risk.
Depositors withdrew savings and investors sold off bank shares en masse on Monday, as the federal government scrambled to reassure Americans that the banking system was secure in the wake of two bank failures that stoked concerns that additional financial institutions could fail.On Tuesday, the Indian rupee is anticipated to fall against the US dollar, mirroring losses in Asian equities and currencies due to fears of a Silicon Valley Bank-related domino effect.
Here are the top updates on Silicon Valley Bank collapse:
1.The MSCI Asia Pacific Financials Index dropped as much as 2.7% early on Tuesday, reaching its lowest level since November 29. 2. Losses widened early on Tuesday, with the MSCI Asia Pacific Financials Index falling as low as 2.5%. In Japan, Mitsubishi UFJ Financial Group Inc. fell as much as 8.3%, while Hana Financial Group Inc. fell 4.7% and ANZ Group Holdings Ltd. fell 2.8%.
2.Tim Mayopoulos, the new chief executive officer of Silicon Valley Bank N.A., stated in a letter to clients on Monday that the bank is open and conducting business as usual. The US Federal Deposit Insurance Corporation (FDIC) protects all existing and new deposits, according to a letter obtained by Reuters.
3.48 hours after the second- and third-largest bank failures in the nation’s history, US President Joseph Biden insisted that the system was secure. As a response to the crisis, regulators guaranteed all deposits at the two banks and developed a programme to protect other institutions from a run on deposits.
4.Despite the White House’s message, investors dumped bank securities in large numbers. Despite the bank’s announcement that it would receive emergency funding from the Federal Reserve and additional funding from JPMorgan Chase, First Republic Bank’s stock price declined by more than 60 percent at the market close.
5.Sunday, New York bank regulators seized Signature Bank, ousted its executives, and transferred day-to-day control to the Federal Deposit Insurance Corporation.
6.Oil prices declined on Tuesday, extending their decline from the previous day, as the collapse of Silicon Valley Bank shook equity markets and sparked fears of a new financial crisis. At 0101 GMT, Brent crude futures fell 9 cents to $80.68 per barrel. Futures on US West Texas Intermediate crude fell 16 cents to $74.64 per barrel. Brent fell to its lowest level since early January on Monday, while WTI fell to its lowest level since December.
7.Indian government bond yields are likely to continue their downward trend on Tuesday, as their US counterparts continue to fall, although a higher-than-expected local inflation reading could limit the move. A trader at a private bank predicted that the yield on the benchmark 10-year, 7.26 percent, 2032 bond will remain within the range of 7.30% to 7.36% following Monday’s decline to 7.3579%. The yield reached its lowest level since February 16 and its largest one-session decline since October 4.
8.Tuesday’s gold prices remained above the crucial $1,900 per ounce mark due to expectations of less aggressive rate increases by the Federal Reserve.
9. Cryptocurrency lender Celsius reported that the company is collaborating with advisors to transmit funds from Signature Bank to other approved authorised depositories. “At this moment, all cash belonging to the estate has been secured,” tweeted Celsius.
10.Non-deliverable forwards indicate that the rupee will open between 82.30 and 82.40 per dollar, compared to 82.1225 per dollar in the previous session.
