US banks experience volatility and trading halts amid bank failures and presidential assurances
Banks saw their share prices take a rollercoaster ride over the weekend and into March 13. Trading was temporarily halted for dozens of United States regional banks amid volatility and falling prices.
The Wall Street Journal reported early in the morning that trading was halted for First Republic Bank, which led bank losses when its price fell 65% by the time trading was stopped. Trading in PacWest Bancorp, down 25%; Zions Bancorp, down 25%; and Regions Financial, down 9%, was also halted.
Those banks saw uneven recovery when trading resumed, with Regions Financial and Zions Bancorp springing back, and the others rising slightly.
A number of other banks were trading significantly lower as well. Fox News noted KeyCorp was down 29.02% Huntington Bancshares down 18.96% at midday on the United States East Coast. Charles Schwab was down 9.5% after trading was halted and resumes as well.
We have to say it: please don't root for a run on the banks and systemic collapse. You have no idea the consequences for your life, regardless of how insulated you believe you are.
— Autism Capital (@AutismCapital) March 12, 2023The largest banks saw smaller losses. Citigroup was down 7.3% at the time of writing and JPMorgan Chase was off 1.3%. At the same time, the S&P 500, Dow and Nasdaq index were all up slightly. Bitcoin (BTC) was up 13.3%.
U.S. President Joe Biden made a short statement on the economy just prior to markets opening March 13, in which he said:
“America can have confidence that the banking system is safe. Your deposits will be there when you need them. […] No losses will be borne by the taxpayers.”Biden also said the management of the banks taken over by the FDIC would be fired and those responsible for the bank failures would be prosecuted. Investors in the failed banks would not be protected, however. “They knowingly took a risk […] That’s how capitalism works,” the president said.
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The banking crisis may affect the crypto industry even after prices stabilize, as the failed Silvergate and Signature banks were crypto-friendly, unlike many traditional banks.