Pacific Western Bank said on Wednesday it had raised $1.4 billion from investment firm Atlas SP Partners as regional banks rush to contain the fallout of a recent collapse of two mid-sized lenders.
U.S. authorities are set to explore ways to bolster financial stability, along with steps to tackle the problems facing First Republic Bank, as central banks ponder whether recent banking sector turmoil makes interest rate rises less pressing.
The banking turmoil sparked by the collapse of Silicon Valley Bank is not yet over, and a significant number of banks will fail within two years, the CEO of hedge fund Man Group told a Bloomberg conference in London on Wednesday.
The European Union’s executive said on Wednesday that upcoming plans to bolster retail investor protections will be “ambitious”, but any ban on banks offering commission in return for business from financial advisers has yet to be decided.
First Republic Bank’s efforts to secure a capital infusion continued without success on Tuesday, as the troubled regional lender started to plan for the possibility it may need to downsize or get a government backstop.
One of the largest investors of the Credit Suisse bonds that were wiped out in the UBS takeover of the troubled Swiss bank still believes in the value of the debt class and the “bail-in” system designed to save banks seen as too big to fail.
Asian lenders may find it difficult to replenish their capital by issuing Additional Tier-1 (AT1) bonds, Citigroup said in a research note on Wednesday, after the Swiss authorities’ move to wipe out Credit Suisse bonds as part of its takeover deal.
Wall Street CEOs and U.S. officials discussing an intervention at First Republic Bank are exploring the possibility of government backing to encourage a deal, Bloomberg News reported on Tuesday, citing people with knowledge of the situation.
Shares of U.S. regional lenders including battered First Republic Bank surged on Tuesday as fears of a wider banking crisis abated and investors turned their focus to the U.S. Federal Reserve’s next move.
Distressed debt investors and large hedge funds are buying up Credit Suisse additional tier-1 bonds at rock-bottom prices after they were written down to zero in the Swiss bank’s rescue by cross-town rival UBS .
