Credit: @Dr_PhillipB via Spectee /TMX
The government’s backstop of deposits at Silicon Valley Bank has not quelled concerns about the health of U.S. banks as Monday saw a sharp sell-off in shares of many bank stocks.
Trading in the shares of several banks was halted on Monday morning after severe declines.
Shares of First Republic fell by a record 67 percent. The bank said late Sunday that it had more than $70 billion in unused liquidity from agreements with the Federal Reserve and J.P. Morgan Chase.
Investors are worried that despite government moves to backstop deposits beyond the usual $250,000 limit, customers of some banks may continue to withdraw funds and topple banks. Sixty-eight percent of First Republic’s deposits are above that threshold, according to Bloomberg news.
Many analysts think large corporate deposits may be particularly prone to flight if a bank’s future looks shaky.
The KBW Bank Index was down 13 percent on Monday morning. Shares of even some of the largest banks were falling. Bank of America shares were off by 4.6 percent. Shares of Wells Fargo fell 6.4 percent. Shares of Citigroup were off by 5.9 percent.
Many smaller banks have seen shares plunge. Shares of PacWest are down more than 50 percent. Shares of Western Alliance Bancorp fell by nearly 85 percent.
Shares of J.P. Morgan Chase were down by less than one percent.
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