Credit Suisse lifeline, Silicon Valley Bank collapse: What you need to know

* Regulators at the U.S. Federal Deposit Insurance Corp (FDIC) have tapped investment bank Piper Sandler Companies to relaunch the auction of Silicon Valley Bank, people familiar with the matter said on Wednesday. * The European Central Bank has contacted banks on its watch to quiz them on their exposure to Credit Suisse, two supervisory sources told Reuters.

Credit Suisse said it will tap a lifeline of up to $54 billion from the Swiss authorities to shore up liquidity and investor confidence, helping its shares recover some ground after a nearly 30% slump. Wednesday's steep drop intensified fears of a global banking crisis fanned by the collapse of two mid-sized U.S. lenders - Silicon Valley Bank and Signature Bank.

DEVELOPMENTS * Credit Suisse said early on Thursday it was taking "decisive action" to strengthen its liquidity by exercising its option to borrow from the Swiss National Bank up to 50 billion Swiss francs ($54 billion).

* Earlier, in a joint statement, the Swiss financial regulator FINMA and the nation's central bank said Credit Suisse "meets the capital and liquidity requirements imposed on systemically important banks" and could access liquidity from the central bank if needed. * Credit Suisse CEO Ulrich Koerner told staff to focus on facts as he pledged to rapidly move forward with a plan to streamline operations.

* Wall Street bank JPMorgan said that Credit Suisse's takeover by another lender, probably its Swiss rival UBS , was the most likely scenario for the embattled bank. * The head of Japan's banking lobby said on Thursday that there were so far no signs of the Japanese financial system being affected by a crisis of confidence in Credit Suisse.

* SVB Financial Group, the company whose former subsidiary Silicon Valley Bank was taken over by U.S. banking regulators last week, is exploring seeking bankruptcy protection, people familiar with the matter said. * Regulators at the U.S. Federal Deposit Insurance Corp (FDIC) have tapped investment bank Piper Sandler Companies to relaunch the auction of Silicon Valley Bank, people familiar with the matter said on Wednesday.

* The European Central Bank has contacted banks on its watch to quiz them on their exposure to Credit Suisse, two supervisory sources told Reuters. One said, however, that they saw Credit Suisse's problems as specific to that bank, rather than systemic. * The U.S. Treasury is monitoring the situation around Credit Suisse and is in touch with global counterparts about it, a Treasury spokesperson said on Wednesday.

* S&P has not placed other U.S. banks on CreditWatch negative since First Republic Bank as it has not seen widespread deposit outflows, the ratings agency said hours after Moody's cut its outlook on the U.S. banking system to negative. * The Federal Reserve is considering tougher rules and oversight for midsize banks similar in size to SVB, a source familiar with the matter said on Tuesday.

MARKETS * Credit Suisse shares jumped around 20% on Thursday, reversing some of the losses that stripped off a quarter of its market value the day before.

* European shares struggled for direction, with caution prevailing ahead of a closely watched European Central Bank rate decision and Credit Suisse shares recovering. * Euro zone government bond yields spiked following news of Credit Suisse securing a liquidity injection. Germany's 2-year bond yield was last up 16 basis points (bps) at 2.548% as investors sold government debt.

QUOTES * "We have proven in recent years that we are in a position to manage risks for both the state and our banking system," the chairman of euro zone finance ministers, Paschal Donohoe, told Germany's Frankfurter Allgemeine Zeitung daily.

 

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)