Today, in the midst of the recent banking turmoil, the US Treasury Secretary, Janet Yellen, will chair an impromptu meeting with the leaders of America’s financial regulatory bodies.
The gathering of the Financial Stability Oversight Council is aimed at exploring strategies to restore stability to the markets. Attendees will include the heads of the Federal Reserve, Federal Deposit Insurance Corp, and other regulatory agencies. The Treasury Department stated that the meeting will not be open to the public.
#Breaking The #USA Treasury Secretary Janet Yellen will convene a meeting with the heads of America's financial regulators today amid the latest banking turmoil 🇺🇸 Heads of the Federal Reserve, Federal Deposit Insurance Corp and other regulatory agencies will join the meeting,… https://t.co/qiUZeR9HKD pic.twitter.com/oRlAn8x48P
— Share_Talk ™ (@Share_Talk) March 24, 2023
Amid concerns over European banks, major US banks such as JPMorgan, Wells Fargo, and Bank of America saw their shares fall by 1% to 2% during early trading. Regional lenders First Republic Bank, PacWest Bancorp, Western Alliance Bancorp, and Truist Financial Corp also experienced drops ranging from 1% to 5%.
The S&P 500 banking index plummeted as much as 2.2%, reaching its lowest level since November 2020, while the KBW regional banking index hit its lowest point since December 2020, but has since stabilized and remained unchanged for the day.
A US probe into Credit Suisse and UBS further dampened the mood, causing European banks to face pressure. As a result, their US-listed shares fell by approximately 5.4% and 4.1%, respectively.
Shares of Deutsche Bank have experienced a slight recovery from their earlier lows but remain down 9% for the day. Unfortunately, this month the German bank’s shares have plummeted by a fifth of their value, and data from S&P Market Intelligence indicates that the cost of its 5-year credit default swaps (CDS) surged to a four-year peak today.
Quincy Krosby, Chief Global Strategist at LPL Financial, stated that Deutsche Bank’s recent headlines only add to the general unease about the stability of the banking system. As a result, investors are opting to sell first and ask questions later, seeking refuge in safer investments.
She also emphasized the importance of avoiding a situation like the Credit Suisse debacle, in which investors woke up on a Sunday night to discover the bank had further deteriorated.
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