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March 17 (Reuters) – Credit Suisse and First Republic Bank shares came under renewed pressure on Friday despite multi-billion dollar support deals, while a source said European Central Bank supervisors see no contagion for euro zone banks from the turmoil.
Shortly after embattled Credit Suisse (CSGN.S) secured an emergency central bank loan of up to $54 billion on Thursday, big U.S. banks swooped in with a $30 billion lifeline for San Francisco-based First Republic (FRC.N), which has been under scrutiny since the collapse of two other mid-size U.S. banks.
DEVELOPMENTS
* First Republic Bank received $30 billion in deposits from several big banks as part of a rescue package but its shares fell around 20% in early trade on Friday.
* Banks sought record amounts of emergency liquidity from the Federal Reserve in the wake of the failure of Silicon Valley Bank (SVB) and Signature Bank, Fed data showed on Thursday.
* SVB Financial Group (SIVB.O) filed for a court-supervised reorganization under Chapter 11 bankruptcy protection to seek buyers for its assets days after former unit SVB was taken over by U.S. regulators.
* Credit Suisse shares resumed their decline on Friday, while more than $450 million in net outflows left the bank’s U.S. and European managed funds between March 13-15, according to Morningstar Direct.
* ECB supervisors meeting on Friday were told deposits were stable across euro zone banks and Credit Suisse exposure was immaterial, a source told Reuters.
* The ECB’s decision to raise interest rates on Thursday signals strong confidence in the solidity of European banks, French ECB policymaker Francois Villeroy de Galhau said.
* China’s central bank will cut the amount of cash that banks must hold as reserves for the first time this year to release liquidity and support the economy.
* Japan’s government must work closely with the central bank and overseas authorities in the wake of banking problems in the West, Japan’s top financial diplomat said on Friday, adding that the Japanese economy was stable.
Singapore, Australia and New Zealand also said they were monitoring financial markets but were confident their local banks were well capitalised and able to withstand major shocks.
MARKETS
* European and U.S. shares fell on Friday as investor sentiment remained fragile after a week of turbulence. The U.S. dollar slipped.
* Banking worries send U.S. markets on dizzying ride.
* As worries over banks swirl, investors seek protection against market crash
Compiled by Kirsten Donovan
Our Standards: The Thomson Reuters Trust Principles.
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