Wall Street banking shares bounce back as Treasury Secretary Janet Yellen pledges to support US lenders
Wall Street banking shares bounced back yesterday as Treasury Secretary Janet Yellen signalled that the US government stood ready to rescue depositors at more smaller lenders if needed.
Yellen told an industry conference that further measures ‘could be warranted’ if any new banking collapses threaten the banking system.
Shares in San Francisco-based lender First Republic surged more than 32 per cent, having collapsed over recent days over fears for its financial health.
Support: Treasury Secretary Janet Yellen told an industry conference that further measures ‘could be warranted’ if any new banking collapses threaten the banking system
The rebound came amid reports that JP Morgan boss Jamie Dimon led talks with other big banks aimed at investing in First Republic.
Fears for America’s regional banks have been in focus over the last couple of weeks amid the fall-out from the collapse of California’s Silicon Valley Bank (SVB) and Signature Bank.
In Europe, the crisis claimed the scalp of Credit Suisse, swallowed up in a cut-price £2.6billion rescue by Swiss rival UBS.
The US government has already weighed in to stabilise the American banking system, guaranteeing billions of dollars’ worth of deposits at SVB and Signature.
In her comments yesterday – which drew a standing ovation from delegates at the American Bankers Association conference in Washington – Yellen signalled more help could be on the way.
She said that overall ‘the situation is stabilising’ and that ‘the US banking system remains sound’.