All articles tagged with #financial contagion
Originally Published 6 months ago — by CNBC
Private credit has expanded into a $1.7 trillion industry, raising concerns among experts that its rapid growth could pose systemic risks to the financial system, especially with the increasing use of paid-in-kind loans.
Originally Published 2 years ago — by BBC
Shares of Chinese developer Evergrande plummeted by approximately 80% as they resumed trading in Hong Kong after a year and a half. The company, which is at the center of a real estate market crisis in China, posted a loss of 33 billion yuan ($4.5 billion) for the first half of 2021. Evergrande's financial troubles have had a ripple effect on the country's property industry, with other developers defaulting on their debts and leaving unfinished building projects. Policymakers are now focused on preventing financial contagion and providing liquidity and credit support to the economy and the real estate sector.
Originally Published 2 years ago — by The Washington Post
Shares of First Republic Bank continue to plummet, posing a fresh challenge for the Biden administration and industry regulators. The bank has lost roughly half of its value and experienced deposit outflows of over $104 billion during the first three months of the year. Government officials, regulators, and industry executives are scrambling to find a solution, with selling the bank to a healthier financial institution being the preferred remedy. However, finding a buyer willing to absorb the unrecognized losses on bonds owned by the bank will not be easy. The Federal Reserve and the Federal Deposit Insurance Corporation will release reports on what went wrong with other midsize banks and propose regulatory changes to avoid future failures.
Originally Published 2 years ago — by Fortune
Bill Ackman, the activist investor, has expressed concern over the risk of financial contagion spiraling out of control after the largest US banks deposited $30bn with First Republic Bank. Ackman said that spreading the risk of financial contagion to achieve a false sense of confidence is bad policy. He added that half measures don't work when there is a crisis of confidence and that he has no investments long or short in the banking sector.
Originally Published 2 years ago — by Benzinga
Hedge fund manager Bill Ackman expressed concern over the spreading of risk of financial contagion to achieve a "false sense of confidence" in First Republic Bank (FRB), after it announced it would receive $30bn in uninsured deposits from larger banks and suspend its dividend. Tesla CEO Elon Musk also commented on the situation, calling the inefficiency of money "astounding." Ackman called for a temporary systemwide deposit guarantee until an expanded and modernized FDIC insurance system is made widely available.
Originally Published 2 years ago — by POLITICO
The FDIC has hired Piper Sandler to auction off Silicon Valley Bank after declining bids submitted by other financial institutions in a separate auction held over the weekend. Lawmakers have been pressuring federal officials to outline their long-term plans for the defunct bank since it was shut down by California officials on Friday. The decision to decline bids has frustrated some Congress members who would’ve preferred to see Silicon Valley Bank acquired. Banking regulators and Biden officials ultimately determined that emergency measures to backstop the bank’s uninsured depositors would provide more clarity and calm amid fears of a possible financial contagion.