- According to the FT, the collapse of Silicon Valley Bank is Wall Street’s gain as customers flee smaller lenders.
- Deposits at JP Morgan, Citi and Bank of America have been flooded by concerns about the stability of smaller banks.
- One banker said, “The calls came in like planes piled up at O’Hare Airport on a snowy day.”
The failure of Silicon Valley Bank wall street profit Stability concerns prompted clients of smaller US lenders to move their funds.
JPMorgan Chase, Citigroup and Bank of America are among Wall Street’s biggest banks and are inundated with requests to send deposits. financial times Citing what people close to the matter said, it reported on Tuesday.
Bank executives have called it the biggest deposit move in more than a decade, the report said. This rush has forced some large lenders to speed up their normal onboarding process for their clients.
The big bank flight comes despite the U.S. government’s emergency steps to stem a potential bank crackdown in the wake of the Silicon Valley bank failure.
“The calls came in today like planes piled up on a snowy day at O’Hare Airport,” one senior banker told the FT of the number of new depositors moving in from local lenders.
The SVB collapse was the biggest bank failure since the 2008 financial crisis, with the Federal Deposit Insurance Corporation taking control of the bank on Friday.
The turmoil has prompted investors to shy away from stocks in the financial sector, raising concerns that similar companies will go bankrupt under similar pressure. On the other hand, customers of smaller lenders began to look to the safety of being “too big to bust the bank”.
SVB and Signature Bank have more than $200 billion in cash deposits from customers, which also failed and were seized by the FDIC.the founders of the startups that became the base of those banks’ customers Looking to big banks.
JP Morgan is reducing the time it takes new corporate clients to access funds, according to the FT. Citi’s private bank, on the other hand, expects him to open an account within a day of his application, instead of the usual one or two weeks.
On Tuesday, fears about the outlook for smaller lenders appeared to have calmed somewhat. First Republic, Western Alliance and PacWest Bancorp stocks recovered from the huge losses recorded in the previous session.