Credit Suisse stock falls to record low as SVB urges clients to return – live

Several Democrats are vowing to hand back donations they received from Silicon Valley Bank’s former CEO Greg Becker and its political action committee (PAC) in the wake of the bank’s sudden collapse.

A source told CNBC Senate Majority Leader Chuck Schumer has vowed to give the funds to charity.

Mr Schumer received a $5,800 donation from Mr Becker to his campaign in June 2021 and a $2,700 donation from its PAC in 2016, records show.

Meanwhile, Rep Maxine Waters said she will hand back the $2,500 donation she was given by the bank’s PAC, reported Politico.

Bitcoin’s recent price revival has once again bolstered the cryptocurrency’s reputation as a form of “digital gold” among some analysts, who claim it serves as a safe-haven asset during times of geopolitical and economic crisis.

The world’s leading cryptocurrency is up more than 10 per cent over the last week, despite turmoil among the banking and tech sector.

Bitcoin’s price trajectory actually mirrored that of gold’s during the collapse of Silicon Valley Bank (SVB) earlier this week, having previously followed a similar path to stocks.

Credit Suisse stocks plunged to a new record low, dropping by more than 21 percent on Wednesday morning as the fallout from the collapse of Silicon Valley Bank (SVB) continues.

Shares in the struggling Swiss bank plummeted for a second consecutive day after its top shareholder Saudi National Bank said it would not provide any further financial assistance.

“We cannot because we would go above 10 percent. It’s a regulatory issue,” Saudi National Bank Chairman Ammar Al Khudairy told Reuters on Wednesday.

Concerns are mounting that the Swiss bank could be the next to collapse after it revealed it had found “material weaknesses” in its financial report on Tuesday.

Wall Street expert Robert Kiyosaki, famed for predicting the Lehman Brothers’ failure, has pegged Credit Suisse as the next major bank most likely to collapse.

In a message to clients, newly appointed Silicon Valley Bank CEO Tim Mayopoulos says: “I look forward to getting to know the clients of Silicon Valley Bank. I come to this role with humility. I also come to this role with experience in these kinds of situations.”

He explains: “I was part of the new leadership team that joined Fannie Mae in the wake of the financial crisis in 2008-09, and I served as the CEO of Fannie Mae from 2012-18. I am very proud of work we did there to restore the company to profitability and to stabilize the housing finance system in a period of unprecedented challenge.”

Mr Mayopoulos adds: “I also come with experience in and an appreciation for the innovation economy. Until recently, I was the president of a Silicon Valley-based software company that provides technology to financial institutions to serve their consumer banking customers. I know how important Silicon Valley Bank has been and continues to be to the success of its clients and the innovation ecosystem.”

The Federal Reserve is facing stinging criticism for missing what observers say were clear signs that Silicon Valley Bank was at high risk of collapsing into the second-largest bank failure in U.S. history.

The Fed was the primary federal supervisor of the bank based in Santa Clara, California, that failed last week. The bank was also overseen by the California Department of Financial Protection and Innovation.

Critics point to many red flags surrounding Silicon Valley Bank, including its rapid growth since the pandemic, its unusually high level of uninsured deposits and its many investments in long-term government bonds and mortgage-backed securities, which tumbled in value as interest rates rose.

James Moore, The Independent’s chief business commentator, writes:

Just what we needed right now: another banking crisis. But after the bloodbath at the beginning of the week, a rally quickly got underway. Regional banks in the United States – in real danger of experiencing a run on their deposits while larger rivals benefit from inflows – found some support.

CNBC reports that private equity firms Apollo Global Management and KKR are among the institutions reviewing a book of loans held by Silicon Valley Bank. The network cites people familiar with the discussions who requested anonymity.

Two of the sources said Apollo may be interested in acquiring a piece of the business but it is unclear if the FDIC would prefer a single buyer for the whole bank.

Bloomberg earlier reported a number of private equity firms were interested in the bank’s loan portfolio, including Ares Management, Blackstone, and Carlyle Group, in addition to Apollo and KKR.

Tim Mayopoulos, the new CEO of Silicon Valley Bank — now technically known as Silicon Valley Bridge Bank — has declared the bank is open for business.

In a message posted to the company’s website and emailed to customers, Mr Mayopoulos said: “We are doing everything we can to rebuild, win back your confidence, and continue supporting the innovation economy. We recognise the past few days have been an extremely challenging time, and we are grateful for your patience.”

He continued: “We are open for business and are hard at work bringing all systems and solutions back online to support you. We are making new loans and fully honoring existing credit facilities.

“The number one thing you can do to support the future of this institution is to help us rebuild our deposit base, both by leaving deposits with Silicon Valley Bridge Bank and transferring back deposits that left over the last several days.”

Underlining the announcement yesterday that depositors have full access to their money, and that both new and existing deposits are fully protected by the FDIC, he characterised the bank as now among the safest in the country thanks to the actions of regulators.

The bank is actively opening new accounts of all sizes and making new loans, Mr Mayopoulos added.

A congressman has been widely praised for posting a two-and-a-half-minute video to Twitter and TikTok clearly laying out the Silicon Valley Bank situation.

At 2am on Monday morning, he filmed a video for social media explaining how the Silicon Valley Bank crisis began, what was being done about it, and to discourage panic.

SVB folded on Friday after failing to raise new capital after it sold government bonds at heavy losses to reimburse customers withdrawing their cash.

Now Robert Kiyosaki, who accurately predicted the 2008 Lehman Brothers’ collapse, warned that Credit Suisse could be at risk as the volatile bond market crashes, with rising interest causing bonds to fall in price.

Kate Plummer has the story.