Merch Store

Aftershocks Part 2: UBS/CS merger staves off failure, but confidence shaken for bank stakeholders = markets now "reaction dependent" and Fed might do so. 4 signs to see first signs the crisis ebbing. Stay OW Tech + Bitcoin.

In a time of uncertainty, investors are "reaction dependent" and the Fed might do so...

Over the weekend, $UBS announced plans to acquire Credit Suisse, in the latest action to contain the widening financial crisis. A total of 4 notable events took place since Friday, all to contain the continuing after-shocks post-SVB (Silicon Valley Bank) failure. At the top of mind is whether the $UBS/$CS combination will contain the crisis and ripples.

Notable #2: 6 national banks, Fed, BoE, BoC, BoJ, ECB and SNB, introduce USD swap lines to provide dollar funding. And these will be conducted with a frequency of daily (vs weekly).Notable #3: On Sat, the Mid-size Bank Coalition of America (MBCA) sent a letter to the FDIC arguing extending insurance to all deposits would halt the exodus of deposits from smaller banks.Notable #4 (smaller): Fed Chair Powell and Treasury Secretary Yellen released a joint statement in support of the SNB actions (supporting $UBS/$CS) and proclaiming the US financial system resilient.SVB's failure triggered several dimensions of risk for the financial system. - first, a revelation that in the digital age, deposits are not "sticky" and flee with a swipe- second, trust for stakeholders as equity holders wiped out and bondholders "haircut"- third, credit li...

Unlock this article with a FREE 30-Day Trial!

An FSI Pro, or FSI Macro subscription is required in order to access this content.

*Free trial available only on a monthly plan

If you are already a member at FS Insight, please Sign In If you don’t have a subscription to FS Insight yet, you can sign up below.

Disclosures (show)
;
3/3
complimentary articles / month
FS Insight Guest PASS

Our FS Insight Guest PASS offers you 3 complimentary research reports every month.

You can unlock 2 more articles by joining our newsletter!

You have reached the maximum amount of complimentary reports for this month.
You will receive 3 more complimentary reports as of the 1st of June.

Don't Miss Out
First Month Free