# How the 2023 banking crisis unfolded Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2023-03-24 Category: NEWS Category URL: https://financedigest.com/category/news Meta Title: Global Banks Face Crisis After Two U.S. Lenders Collapse Meta Description: From U.S. lenders collapsing to $30 billion rescue deals, follow the unfolding turmoil in the global banking sector. Stay informed with our timeline. URL: https://financedigest.com/how-the-2023-banking-crisis-unfoldedhtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2023-03-24t165651z1lynxmpej2n0pgrtroptp4global-banks-deposits-1736814259062-compressed.jpg) (Reuters) – Global banks are staring at the biggest crisis since 2008 after two U.S. lenders collapsed, Switzerland’s Credit Suisse sought a government lifeline and America’s top banks agreed to offer a $30 billion rescue deal – all in the space of 10 days. The [turmoil has ratcheted up fears](https://www.financedigest.com/banking-turmoil-means-recession-fears-are-creeping-back.html "Banking turmoil means recession fears are creeping back") of a contagion and prompted action from the U.S. Federal Reserve, U.S. Treasury and the private sector, but it remains to be seen whether that will be enough to contain the damage. Below is a timeline of key events: Date Development March 8 [Silicon Valley Bank](https://www.financedigest.com/exclusive-u-s-regulator-seeks-sale-of-silicon-valley-bank-signature-bank-portfolios-sources.html "Exclusive-U.S. regulator seeks sale of Silicon Valley Bank, Signature Bank portfolios-sources") (SVB) says it intends to raise $2.25 [billion in common equity](https://www.financedigest.com/uk-investors-add-1-2-billion-to-equity-funds-in-march-calastone.html "UK investors add .2 billion to equity funds in March – Calastone") and preferred convertible stock. March 9 The S&P 500 bank index tumbles following SVB’s announcement and crypto bank Silvergate’s decision to wind down operations. SVB stock collapses by 60%, leading the company to scramble to reassure its clients their money was safe. March 10 A California regulator shuts SVB and appoints the Federal Deposit Insurance Corporation (FDIC) as receiver. U.S. [bank stocks](https://www.financedigest.com/stocks-rise-after-bank-sale-fuels-investor-risk-appetite.html "Stocks rise after bank sale fuels investor risk appetite") extend losses with regional lenders [hit the hardest](https://www.financedigest.com/digital-divide-hits-rural-black-americans-hardest.html "‘Digital divide’ hits rural Black Americans hardest"). U.S. lenders First Republic Bank and Western Alliance say their liquidity and deposits remained strong, aiming to calm [investors worried](https://www.financedigest.com/uk-stocks-slip-as-rate-hike-worries-grip-investors.html "UK stocks slip as rate hike worries grip investors") of a spill-over. SVB [CEO Greg Becker leaves the board](https://www.financedigest.com/shareholder-group-iss-backs-barclays-board-over-former-ceo-staley.html "Shareholder group ISS backs Barclays board over former CEO Staley") of directors at the Federal Reserve Bank of San Francisco. U.S. Treasury Secretary Janet Yellen meets with [banking regulators on the collapse of SVB](https://www.financedigest.com/swiss-regulator-monitoring-banks-and-insurers-after-svb-collapse.html "Swiss regulator monitoring banks and insurers after SVB collapse"). March 11 The U.S. Federal Reserve and the FDIC weigh the creation of a [fund that would allow regulators](https://www.financedigest.com/how-solvency-ii-transformed-itself-the-fund-industry-and-regulation.html "How Solvency II transformed itself, the fund industry and regulation") to backstop more [deposits at banks](https://www.financedigest.com/european-central-bank-to-raise-deposit-rate-to-3-25-by-mid-year-reuters-poll.html "European Central Bank to raise deposit rate to 3.25% by mid-year: Reuters poll"), Bloomberg News reported. March 12 Yellen [says she is working closely with banking](https://www.financedigest.com/boes-bailey-says-bank-reforms-worked-but-questions-about-liquidity-buffers.html "BoE’s Bailey says bank reforms worked but questions about liquidity buffers") regulators to respond to the SVB collapse. U.S. officials [later say SVB customers will have access](https://www.financedigest.com/are-the-over-55s-accessing-their-pensions-early-failing-to-plan-for-later-life.html "Are the over-55s accessing their pensions early failing to plan for later life?") to their deposits. New [York state’s Department of Financial](https://www.financedigest.com/new-york-holds-top-spot-london-second-in-z-yen-financial-centre-survey.html "New York holds top spot, London second in Z/Yen financial centre survey") Services takes possession of New York-based [Signature Bank](https://www.financedigest.com/kpmg-stands-by-audits-of-silicon-valley-bank-and-signature-bank-ft.html "KPMG stands by audits of Silicon Valley Bank and Signature Bank – FT"). March 13 [HSBC acquires the UK subsidiary of Silicon Valley](https://www.financedigest.com/hsbc-acquires-british-arm-of-stricken-silicon-valley-bank.html "HSBC acquires British arm of stricken Silicon Valley Bank") Bank for 1 pound. The FDIC says it has transferred all deposits of SVB to a newly created bridge bank. U.S. President Joe Biden says the administration’s actions should give Americans confidence that the banking system is safe. Western Alliance Bancorp says more than 50% of its total deposits were insured and it has over $25 billion of cash reserves. Shares of U.S. regional banks slump, led by First Republic, while credit [risk indicators flash red as investors](https://www.financedigest.com/institutional-investors-back-shell-board-lawsuit-over-climate-risk.html "Institutional investors back Shell board lawsuit over climate risk") worry about contagion risks. U.S. Federal Home Loan Banks beef up their lending warchests to provide more liquidity to [banks amid](https://www.financedigest.com/britains-digital-banks-need-support-amid-banking-turmoil-trade-body.html "Britain’s digital banks need support amid banking turmoil – trade body") continued higher-than-usual demand for funds. March 14 Moody’s [Investors Service revises its outlook](https://www.financedigest.com/oil-steadies-after-dipping-on-china-outlook-investors-await-fed-clues.html "Oil steadies after dipping on China outlook; investors await Fed clues") on the U.S. banking system to “negative” from “stable”, citing heightened risks. U.S. prosecutors investigate the collapse of SVB, a source familiar with the matter told Reuters. March 15 [Troubled Swiss giant Credit](https://www.financedigest.com/explainer-what-are-credit-default-swaps-and-why-are-they-causing-trouble-for-europes-banks.html "Explainer-What are credit default swaps and why are they causing trouble for Europe’s banks?") Suisse says it will strengthen its liquidity by borrowing from the Swiss National [Bank up to 50 billion](https://www.financedigest.com/20-billion-in-bank-service-fees-are-you-overpaying.html " Billion in Bank Service Fees: Are You Overpaying?") Swiss francs ($54 billion). March 16 Yellen tells a U.S. Senate hearing that uninsured deposits would only be guaranteed in banks deemed a contagion threat, raising [fears about smaller](https://www.financedigest.com/uk-economy-set-for-smaller-hit-in-2023-than-previously-feared-imf.html "UK economy set for smaller hit in 2023 than previously feared – IMF") banks. Large U.S. [banks inject $30 billion](https://www.financedigest.com/credit-suisse-54-billion-lifeline-offers-limited-respite-to-global-banks.html "Credit Suisse billion lifeline offers limited respite to global banks") in deposits into First Republic Bank to shore up the lender’s finances. March 17 SVB Financial Group files for Chapter 11 bankruptcy protection. March 18 UBS is examining a takeover of [Credit Suisse](https://www.financedigest.com/mitsubishi-ufj-to-postpone-at1-bond-issuance-in-credit-suisse-fallout.html "Mitsubishi UFJ to postpone AT1 bond issuance in Credit Suisse fallout") that could see the Swiss government offer a guarantee against the risks involved, say two people with knowledge of the matter. March 19 UBS agrees to buy [Credit Suisse](https://www.financedigest.com/swiss-franc-grapples-with-safe-haven-identity-crisis-after-credit-suisse.html "Swiss franc grapples with safe-haven identity crisis after Credit Suisse") for 3 billion Swiss francs in stock and agrees to assume up to 5 billion francs in losses. March 20 The FDIC decides to break up SVB and hold two separate auctions for its traditional deposits unit and its [private bank](https://www.financedigest.com/gucci-banks-on-private-salons-for-the-ultra-rich-to-revive-sales.html "Gucci banks on private ‘salons’ for the ultra-rich to revive sales") after failing to find a buyer for the lender. March 21 U.S. Treasury Secretary Janet Yellen tells bankers that she is prepared to intervene to protect depositors in smaller U.S. banks. March 22 Yellen tells lawmakers that she has not considered or discussed “blanket insurance” to U.S. banking deposits without approval by Congress, again stirring up investor worry. Federal Reserve Chair Jerome Powell [says SVB’s](https://www.financedigest.com/over-a-dozen-chinese-based-firms-say-they-have-minimal-exposure-to-svb.html "Over a dozen Chinese-based firms say they have minimal exposure to SVB") failure is not indicative of [wider weaknesses in the banking](https://www.financedigest.com/hsbc-appoints-new-markets-head-amid-wider-investment-bank-reshuffle.html "HSBC appoints new markets head amid wider investment bank reshuffle") system. March 24 Deutsche [Bank shares](https://www.financedigest.com/bank-shares-rise-after-credit-suisse-rescue-eases-crisis.html "Bank shares rise after Credit Suisse rescue eases crisis") drop 8.4% in Europe and the cost of insuring the company’s bonds against the risk of default spike. Other [banking stocks](https://www.financedigest.com/asian-stocks-rally-as-bank-jitters-calm-alibaba-lifts-mood.html "Asian stocks rally as bank jitters calm, Alibaba lifts mood") also slump in Europe. Sources: company statements, [press conferences](https://www.financedigest.com/5-top-tips-when-holding-a-crisis-press-conference.html "5 Top Tips When Holding a Crisis Press Conference"), sources, media reports (Reporting by Mehnaz Yasmin amd Manya Saini in Bengaluru; Editing by Devika Syamnath) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---