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IPFS News Link • Central Banks/Banking

New fears of banking contagion are triggered by crisis that killed Silicon Valley Bank...


At least 20 regional banks were hit with trading halts today as turmoil sparked by Silicon Valley Bank's collapse gripped Wall Street.

Hedge fund boss Bill Ackman warned the 'economy will not function' unless Joe Biden 'guarantees all deposits now' as the contagion spread to the Big Four trillion-dollar US banks. Wells Fargo's stock dropped 7.5 percent, Bank of America fell 7.4 percent, Citigroup plunged 5.8 percent and JP Morgan was down 2.7 percent. 

Among the worst affected regional banks was Western Alliance which saw its stock dive by 75 percent as the opening bell sounded. Trading circuit breakers were also imposed on First Republic as its price fell by two thirds and PacWest which dropped by 35 percent.

'Our economy will not function effectively without our community and regional banking system. Therefore, the Federal Deposit Insurance Corporation needs to explicitly guarantee all deposits now. Hours matter,' Ackman said.

'We need to hear from our gov't that it is explicitly committed to preserving our system of smaller banks. While each small bank is not "systemically important" like @jpmorgan or @Citi, collectively they are as, if not more, systemically important.'