Banking crisis roundup - Wednesday

15 Mar 2023

Quantum Commodity Intelligence - Oil prices have been dominated by the banking crisis since last week's collapse of Silicon Valley Bank, with contagion spilling over into the commodities sector.

**Ratings agency Moody's warned of more pain ahead for the US banking system after a run on deposits led to the collapse of SVB, cutting the entire sector to "negative" from stable late Tuesday and warned of "a rapid deterioration in the operating environment".

**US-listed shares in Credit Suisse crashed around 25% Wednesday to a fresh record low, reflecting concerns over the wider impact on the global banking sector. Its biggest shareholder, Saudi National Bank, said it would not be able to inject further funds into Credit Suisse if there was another call for additional liquidity.
**S&P cut its rating for First Republic Bank to junk status. The ratings agency said in a statement the California-based bank's credit rating had been reduced to BB+ from A-, and it remains on credit watch negative and further downgrades are possible.

**There remains a threat, or contagion, to the broader financial system, according to Larry Fink, CEO of BlackRock, Fortune Magazine reported.

"The regulatory response has so far been swift, and decisive actions have helped stave off contagion risks. But markets remain on edge," Fink said in a much-awaited Wednesday letter to stakeholders. "Are the dominoes starting to fall?"

**European banking stocks plunged 7% in their worst session since Russia launched its full-scale invasion of Ukraine in February 2022, according to Eikon data.

**Short sellers had amassed bearish positions worth more than $15.7 billion against European banks by Tuesday, according to data from S&P Global Market Intelligence.

**USA Today reported that Republicans are blaming the collapse of SVB on corporate "wokeness," not lax regulation, ill-fated business decisions, or panicked customers rushing to pull out their money.

House Oversight Committee chairman and Kentucky Republican James Comer called Silicon Valley Bank "one of the most woke banks in their quest for the ESG-type policy and investing."