Global banks are staring at the biggest crisis since 2008 after two U.S. lenders collapsed, Switzerland’s Credit Suisse <CSGN.S> sought a government lifeline and America’s top banks agreed to offer a $30 billion rescue deal – all in the space of 10 days.
The turmoil has ratcheted up fears of a contagion and prompted action from the U.S. Federal Reserve, U.S. Treasury and the private sector, but it remains to be seen whether that will be enough to contain the damage.
Below is a timeline of key events:
| Date | Development |
|---|---|
| March 8 | Crypto-friendly bank Silvergate Capital Corp <SI.O> says it would wind down operations and voluntarily liquidate. |
| Silicon Valley Bank (SVB) says it intends to raise $2.25 billion in common equity and preferred convertible stock. | |
| March 9 | The S&P 500 bank index <.SPXBK>tumbles following SVB’s announcement and crypto bank Silvergate’s decision to wind down operations. SVB stock collapses by 60%, leading the company to scramble to reassure its clients their money was safe. |
| March 10 | A California regulator shuts SVB and appoints the Federal Deposit Insurance Corporation (FDIC) as receiver. U.S. bank stocks extend losses with regional lenders hit the hardest. |
| U.S. lenders First Republic Bank <FRC.N> and Western Alliance <WAL.N>say their liquidity and deposits remained strong, aiming to calm investors worried of a spill-over. | |
| SVB CEO Greg Becker leaves the board of directors at the Federal Reserve Bank of San Francisco. | |
| U.S. Treasury Secretary Janet Yellen meets with banking regulators on the collapse of SVB. | |
| March 11 | The U.S. Federal Reserve and the FDIC weigh the creation of a fund that would allow regulators to backstop more deposits at banks, Bloomberg News reported. |
| March 12 | Yellen says she is working closely with banking regulators to respond to the SVB collapse. U.S. officials later say SVB customers will have access to their deposits. |
| New York state’s Department of Financial Services takes possession of New York-based Signature Bank. | |
| March 13 | HSBC <HSBA.L>acquires the UK subsidiary of Silicon Valley Bank for 1 pound. |
| The FDIC says it has transferred all deposits of SVB to a newly created bridge bank. | |
| U.S. President Joe Biden says the administration’s actions should give Americans confidence that the banking system is safe. | |
| Western Alliance Bancorp says more than 50% of its total deposits were insured and it has over $25 billion of cash reserves. Shares of U.S. regional banks slump, led by First Republic <FRC.N>, while credit risk indicators flash red as investors worry about contagion risks. | |
| U.S. Federal Home Loan Banks beef up their lending warchests to provide more liquidity to banks amid continued higher-than-usual demand for funds. | |
| March 14 | Moody’s Investors Service revises its outlook on the U.S. banking system to “negative” from “stable”, citing heightened risks. |
| U.S. prosecutors investigate the collapse of SVB, a source familiar with the matter told Reuters. | |
| March 15 | Troubled Swiss giant Credit Suisse <CSGN.S> says it will strengthen its liquidity by borrowing from the Swiss National Bank up to 50 billion Swiss francs ($54 billion). |
| March 16 | Yellen tells a U.S. Senate hearing that uninsured deposits would only be guaranteed in banks deemed a contagion threat, raising fears about smaller banks. |
| Large U.S. banks inject $30 billion in deposits into First Republic Bank <FRC.N> to shore up the lender’s finances. | |
| March 17 | SVB Financial Group files for Chapter 11 bankruptcy protection. |
| March 18 | UBS is examining a takeover of Credit Suisse that could see the Swiss government offer a guarantee against the risks involved, say two people with knowledge of the matter. |
| March 19 | UBS <UBSG.S>agrees to buy Credit Suisse <CSGN.S> for 3 billion Swiss francs in stock and agrees to assume up to 5 billion francs in losses. |
| March 20 | The FDIC decides to break up SVB and hold two separate auctions for its traditional deposits unit and its private bank after failing to find a buyer for the lender. |
| March 21 | U.S. Treasury Secretary Janet Yellen tells bankers that she is prepared to intervene to protect depositors in smaller U.S. banks. |
| March 22 | Yellen tells lawmakers that she has not considered or discussed “blanket insurance” to U.S. banking deposits without approval by Congress, again stirring up investor worry. Federal Reserve Chair Jerome Powell says SVB’s failure is not indicative of wider weaknesses in the banking system. |
| March 24 | Deutsche Bank shares drop 8.4% in Europe and the cost of insuring the company’s bonds against the risk of default spike. Other banking stocks also slump in Europe. |
| March 25 | U.S. authorities consider the expansion of an emergency lending facility that would offer banks more support, according to a Bloomberg News report. |
| March 27 | First Citizens BancShares Inc <FCNCA.O>says it would acquire the deposits and loans of failed Silicon Valley Bank. |
Sources: company statements, press conferences, media reports
(Reporting by Mehnaz Yasmin amd Manya Saini in Bengaluru; Editing by Devika Syamnath and Krishna Chandra Eluri