Customers calm at under-pressure US banks

Customers calm at under-pressure US banks

A man walks past a branch of Signature Bank in New York city on March 13, 2023
A man walks past a branch of Signature Bank in New York city on March 13, 2023. Photo: Ed JONES / AFP
Source: AFP

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Customers of under-pressure US banks said Monday they were reassured after authorities stepped in to protect deposits, even as markets fretted about systemic contagion.

A few dozen account holders waited outside a San Francisco branch of stricken SVB -- which was seized by regulators on Friday after it collapsed, but there was no evident panic.

"We know that things are in place with the FDIC," said Wyatt Boumedine, the chief finance officer of a Silicon Valley start up, referring to a federal deposit protection scheme.

He said his company, which banks with SVB and other institutions, had experienced no difficulties making payroll, and was working to reassure employees that they would not lose out.

"Yesterday the information coming from the Fed really relieved everybody in (Silicon) Valley... that we will have less issue accessing the funds."

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Outside a New York branch of Signature Bank, which was closed by regulators on Sunday, Edward Tricomi, a hair salon business owner, said "We're staying with the bank."

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"The key thing, everybody should know this: don't panic, don't run on it, because everybody loses. So if everybody just keeps cool, you'll be alright," he added.

Bank stocks have fallen around the world, with even major institutions getting hit as investors worried that the troubles of a few banks could spread.

Governments in Europe and the United States have moved to reassure markets that the world is not in for a repeat of the 2008 financial crisis, when the global banking system seized up.

In a joint statement on Sunday, the US Federal Reserve, the Federal Deposit Insurance Corporation (FDIC) and the Treasury Department said SVB depositors would have access to "all of their money."

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US President Joe Biden on Monday said the sector was secure and Americans could "have confidence that... your deposits will be there when you need them."

Boumedine, who said he was only at the bank to get information, said he was reassured by Biden's statement.

"I think that he's taking the right approach," he told AFP.

"It's not a systemic issue (and) I have full confidence in the current administration."

Others in the queue were also sanguine.

"This is not anything abnormal that hasn't happened in the past," said one investor who declined to give his name.

"The FDIC said they're giving all their funds out today, so that's why I'm here."

One New York finance worker, who did not want to give his name, said he had come to take the temperature at a branch of First Republic, whose stocks plunged Monday.

"When you see there is no line here, it doesn't seem to be really an issue," he told AFP.

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"I think that the government intervening and effectively, backstopping all the depositors in Silicon Valley Bank was helpful in de-escalating any potential issue."

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Source: AFP

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