New York, Mar 15 (EFE).- Share prices of companies in the US financial sector and beyond suffered heavy losses Wednesday, as the repercussions from the sudden failures of Silicon Valley Bank and Signature Bank continued to ripple through financial markets.
Tuesday’s brief bounce back in share values, triggered by President Joe Biden’s assurances that the US banking system is safe and that deposits at the two newly shuttered banks would be backstopped, was short-lived.
On Wednesday, Zurich-based investment bank Credit Suisse’s shares hit a new all-time low after the Saudi National Bank, its largest investor, said it would not provide any further financial assistance due to regulatory restrictions.
Among the largest US banks, shares in JP Morgan Chase were down nearly 5 percent in late afternoon trading, while Goldman Sachs (-3.60 percent), Citigroup (-5.85 percent) and Wells Fargo (-3.71 percent) also suffered steep declines.
Bank of America’s shares were down a more mild 1.23 percent.
Non-banking financial entities like American Express (-3.11 percent), Travelers (-3.46 percent) and Visa (-1.18 percent) also were in the red.
Regional banks that had plunged on Monday sustained major declines once again on Wednesday, with First Republic down by nearly 17 percent after its credit rating was downgraded by Fitch Ratings and S&P Global Ratings.
The Wall Street Journal, in an article Wednesday titled “Bank Chaos Clouds Outlook for Markets,” noted that last week’s collapse of SVB and Tuesday’s decision by Moody’s Investors Service to place the credit ratings of six US banks on review for a possible downgrade have blindsided investors and generated massive market upheaval.
For his part, Peter Boockvar of Bleakley Financial Group told US business news channel CNBC that although Credit Suisse’s problems do not appear to be related to the woes of medium-sized US banks, the combination of the two issues could spark a broader reexamination of the banking system among investors. EFE