Credit Suisse lifeline, First Republic rescue: What you need to know

(C) Reuters. Customers wait in line outside a branch of the Silicon Valley Bank in Wellesley, Massachusetts, U.S., March 13, 2023. REUTERS/Brian Snyder

(Reuters) – Credit Suisse began a make-or-break weekend after some rivals grew cautious in their dealings with the struggling Swiss lender, and its regulators urged it to merge with UBS AG.

At least four major banks, including Societe Generale (OTC:SCGLY) and Deutsche Bank (ETR:DBKGn), are restricting new trades involving Credit Suisse or its securities, five sources told Reuters.

DEVELOPMENTS

*Credit Suisse shares jumped 9% in after-market trading after the Financial Times reported UBS was in discussions to take over all or parts of its Swiss rival as the boards of the two banks were set to meet separately over the weekend.

* SVB Financial Group filed for a court-supervised reorganisation under Chapter 11 bankruptcy protection to seek buyers for its assets, days after regulators took over its former unit Silicon Valley Bank.

* Credit Suisse saw more than $450 million in net outflows from its U.S. and European managed funds from Monday to Wednesday, Morningstar Direct said.

* Moody’s (NYSE:MCO) downgraded First Republic Bank (NYSE:FRC)’s debt. Before the announcement, the bank’s shares plunged nearly 33%, capping an 80% wipeout for the past 10 sessions, despite a rescue package with $30 billion in deposits injected by large U.S. banks.

* The U.S. Federal Deposit Insurance Corp (FDIC) is considering steps to facilitate takeovers of Signature Bank (NASDAQ:SBNY) and Silicon Valley Bank, a source told Reuters.

* U.S. President Joe Biden said the banking crisis has calmed down after the collapse of Silicon Valley Bank and Signature, seeking to reassure investors and depositors. He urged Congress to give bank regulators greater power.

* A senior official at the People’s Bank of China said the collapse of Silicon Valley Bank (SVB) showed how rapid monetary policy shifts were having spillover effects, state-owned newspaper Shanghai Securities News reported.

MARKETS

* Investor sentiment remained fragile on Friday, leaving global equities under pressure while gold prices posted their largest one-week rally in three years. The dollar slipped and Treasury yields fell.

* Banking worries have sent U.S. markets on dizzying ride this week.

* As worries over banks swirl, investors are seeking protection against a market crash