U.S. banking giants vow to prop up First Republic Bank | U.S. banking crisis | U.S. News live | WION

contagion deepened with the demise of Signature Bank to follow that of Silicon Valley Bank and depositors began moving cash to larger lenders First Republic bank's stock closed up 10 on news of the rescue but its shares fell 18 in aftermarket trading after the bank said that it would suspend its dividend news of the rescue also helped boost Wall Street indices smaller Banks also rebounded from the recent sell-off the Federal Reserve has lent U.S banks nearly 12 billion dollars under a new one-year lending program that was unveiled on Sunday night U.S treasury secretary said that authorities moved swiftly to protect depositors at Silicon Valley Bank and Signature Bank she said that authorities acted when they saw a serious risk of contingent that could have triggered runs on many Bans will we felt that there was a serious risk of contagion that could have brought down and triggered runs on many banks and that something given that our judgment is that the banking system overall is safe and sound um depositors should have confidence in the system and we took these actions as per the United States Central Bank the total outstanding amount of advances under the bank term funding program reached 11.9 billion dollars on Wednesday 's news agency also reports the Committees in talks for more on this we are now being joined by Syed Javed Hassan who is an economic columnist and former chairman of the economic Advisory Group Mr Hassan is joining us from Islamabad sir thank you very much for speaking with weon thank you very much for having me sir Banks coming to the rescue of banks first Swiss Central Bank rescues credit space now Consortium of 11 banks have come to the rescue of First Republic is the crisis averted or does it run deep well we should start with the Silicon Valley Bank for that the Federal Reserve had to invoke the risk and systemic risk risk as an exception for depositors now let me explain this a bit the U.S banks have a insurance policy of about through physic uh where there's about 250 000 of uh deposits are insured by the physics system now it was felt that this would not be enough to avert the crisis on further back so the for the first time in a long period this Federal Federal Reserve has invoked the systemic risk exception so there's obviously a fair there's a systemic risk and we are beginning to see that as you mentioned Signature Bank uh Federal uh the Federal Bank all of these things now on top of that we have had the Credit Suisse debacle now we have seen something like 120 billion dollars of deposits being withdrawn from Credit Suisse uh the Central Bank of Switzerland has come and allowed a credit line of 50 billion now it remains to be seen if we have averted the crisis uh the noise is the right one being made the fact that 30 billion dollars have come through the major banks in the the U.S to support the Federal Bank uh all of that is is good news but it really remains to be seen whether we have averted the crisis because there's jitteriness among the depositors uh the smaller banks are seeing some deposits being withdrawn you see one day shares going up then the next day you are against these shares sliding down so I think it's a bit early to say whether the crisis has been averted uh the fact of the matter is the depositors are nervous about the smaller Banks all over and because some of the lending policies have been very liberal and and there is concern that whether these smaller banks will be able to sustain the the the the crisis there is and as you mentioned there's the self-fulfilling promise issue that uh the the fact that people fear that there's going to be a a a collapse withdraw money and that leads to the collapse anyway so uh I think it's good measures that have been taken by the Federal Reserve Bank in the U.S the Swiss Central Bank but it remains to be seen whether or the crisis whether in Credit Suisse or the other smaller banks in the US has been completely averted so uh build these bailouts that are now happening incentivize risky behavior and you know Foster uh what is called too big a bank to fail mentality I think I think we are already beginning we're already seeing some effect of that the fact that in 2008 the two big uh too too big to feel phenomenon happen and there was a major pumping in of liquidity by The Reserve Bank in the U.S as well as other Banks across the world has probably fostered this uh attitudes towards uh being a bit careless about lending policies even though they were strengthening and there was quite a lot of measures taken to avoid it but the very factor of the matter that we are seeing what we are seeing with SVP and other Banks suggests that uh that that there has been a sort of fostering of uh careless policies by the Banks themselves and now as I said I do not want to be one of those who actually promote the idea of self-fulfilling promise I would like to think that the measures taken by the central bank as both in Switzerland and the Us and other Banks across the world will now contain the crisis uh but the Contagion is there there is fear among depositors and we are seeing withdrawals I mean Swiss credit Swiss we saw a withdrawal of something like 120 billion dollars of uh deposits being taken out uh you're saying similarly in the U.S signature bank so that is the problem the depositors need to be somehow calmed we are not sure uh we have really crossed that bridge yet so uh uh let's explore that point a little bit further what does this mean what we are witnessing now to the businesses with the deposits in these Banks what should they do that's that's a really tricky question I I I would want to advise every businessman not not to start not participate in the crisis and not withdraw uh their their funds especially given the support that we are seeing from the Federal Reserves as well as the larger Banks but having said that uh it is for the individual businesses to decide you do not want to precipitate a crisis but obviously the the businesses and and individuals have to take their own uh their own decisions and and uh given that there is some degree of uh concern about the lending policies and the riskiness of uh assets there is on on the books of any of these Banks uh obviously every every depositor every business has to take its own decision and and and and they should be talking to experts as to the health of the balance sheets of individual Banks yes one final question to you yes sir sorry one final question was very careless and and and we are seeing the consequences of that yes uh so will Banks once again get away without being punished for what some call too risky a behavior you know the thing is the problem is that if banks get punished the whole world gets punished we all get punished economy is going to a slump there could be a major recession we have just come out of covet so while there is a inclination that you want to see a better Behavior by the Banks we certainly want to avoid punishment because that would punish all of us all right Mr Hassan thanks very much for speaking with Beyond joining us from Islamabad and welcome our top focus of this are the collapse of Silicon Valley Bank last week raised questions about what else might be lurking in the wider system within days the market turmoil and snare Swiss lender Credit Suisse forcing it to borrow up to 54 billion dollars from Switzerland central bank now large U.S banks have injected 30 billion dollars in deposits into First Republic Bank U.S banks have rushed to the rescue of First Republic Bank the lender is caught up in a widening crisis triggered by the collapse of two other mid-sized U.S lenders over the past week only say investors are fretting about potential runs on global bank deposits with contagion torque sweeping across trading floors yesterday while three's giant Credit Suisse announced boring to show up liquidity the spotlight shifted back to the United States the shares of First Republic a regional lender had tumbled 70 in the first nine trading sessions some of the biggest U.S banking names including JP Morgan Chase City Group Bank of America Wells Fargo Goldman sucks and Morgan Stanley are involved in the rescue U.S regulator Sage the show of support is most welcome ensures the resilience of the banking system this week's actions demonstrate our Resolute commitment to ensure that our financial system remains strong and the depositors savings remain safe First Republic Bank is not the first Canary in the mind but there are canaries that are now feet up and those include things like Silicon Valley Bank Signature Bank and lots of worry about Credit Suisse the storage financial institution in a market all prophecies are self-fulfilling so if people begin to feel like a bank is going to fail they pull their money and they tell everyone this bank is going to fail and almost no matter how stable the bank was when the Story begins this begins to sap the confidence deny the assets and create a situation where also none of the other players in the market want to stand next to you or want to do business with you around on financing on Sunday rates through JP Morgan and had given fast for public access to 70 billion dollars in funds but that failed to come investors worries of a contagion deepen through the demise of Signature Bank to follow that of Silicon Valley and deposits has begun moving costs to larger lenders First Republic Banks stock closed up 10 percent on news of the rescue but its shares fell 18 after after market trading after the bank said it would suspend its dividend the use of the rescue also helped boost wall Street's indices smaller Banks also rebounded from the recent sell-off the Federal Reserve has lent U.S banks nearly 12 billion dollars and a new one-year lending program unveiled on Sunday U.S treasury secretary said authorities moved swiftly to protect depositors at Silicon Valley Bank and Signature Bank she said authorities acted when they saw a serious risk of contingent that could have triggered rounds on many bunks will we felt that there was a serious risk of contagion that could have brought down and triggered runs on many banks and that something given that our judgment is that the banking system overall is safe and sound depositories should have confidence in the system and we took these actions asked by the U.S Central Bank the tortellin outstanding amount of advances under the bankster and funding program reached 11.9 billion dollars on by Wednesday our top story the collapse of Silicon Valley Bank last week raised questions about what else might be lurking in the wider system within days the market turmoil ensnared Switz lender credit Suites forcing it to borrow up to 54 billion dollars from Switzerland's central bank now large U.S banks have injected 30 billion dollars in deposits into First Republic Bank U.S banks have rushed to the rescue of the First Republic Bank the lender is caught up in a widening crisis triggered by the collapse of two other mid-sized U.S lenders over the past week analysts say that investors are fretting about potential runs on global bank deposits with contagion talks sweeping across trading floors yesterday while Swiss joined Credit Suisse announced borrowing to shore up liquidity the spotlight shifted back to the United States the shares of First Republic a regional lender had tumbled 70 percent in the last nine trading sessions some of the biggest U.S banking names including JPMorgan Chase Citigroup Bank of America Wells Fargo Goldman Sachs and Morgan Stanley are involved in the rescue U.S Regulators said that the show of support was most welcome and shows the resilience of the banking system this week's actions demonstrate our Resolute commitment to ensure that our financial system remains strong and the depositor's savings remain safe First Republic Bank is not the first Canary in the mind but there are canaries that are now feed up and those include things like Silicon Valley Bank Signature Bank and lots of worry about Credit Suisse the storage financial institution in a market all prophecies are self-fulfilling so if people begin to feel like a bank is going to fail they pull their money and they tell everyone this bank is going to fail and almost no matter how stable the bank was when the Story begins this begins to sap the confidence deny the assets and create a situation where also none of the other players in the market want to stand next to you or want to do business with you a round of financing on Sunday raised through JP Morgan had given First Republic access to 70 billion dollars in funds but that failed to come the investors worries of a contagion deepened with the demise of Signature Bank to follow that of Silicon Valley Bank and depositors began moving cash to larger lenders First Republic Banks stock closed up 10 on news of the rescue but it shares well 18 in aftermarket trading after the bank said that it would suspend its dividend news of the rescue also helped to boost Wall Street for indices smaller Banks also rebounded from the recent sell-off the Federal Reserve has lent U.S banks nearly 12 billion dollars under a new one-year lending program that was unveiled on Sunday night U.S treasury secretary said that authorities moved swiftly to protect depositors at Silicon Valley Bank and Signature Bank she said that authorities acted when they saw a serious risk of contagion that could have triggered runs on many banks well we felt that there was a serious risk of contagion that could have brought down and triggered runs on many banks and that something given that our judgment is that the banking system overall is safe and sound depositories should have confidence in the system and we took these actions as per the United States Central Bank the total outstanding amount of advances under the bank term funding program reached 11.9 billion dollars on Wednesday for more on this we are now being joined by Syed Javed Hassan who is an economic columnist and former chairman of the economic Advisory Group Mr Hassan is joining us from Islamabad sir thank you very much for speaking with weon thank you very much for having me so Banks coming to the rescue of banks first Swiss Central Bank rescues credit space now Consortium of 11 banks have come to the rescue of First Republic is the crisis averted or does it run deep well we should start with the Silicon Valley Bank for that the Federal Reserve had to invoke the risk and systemic risk risk as an exception for depositors now let me explain this a bit the U.S banks have a insurance policy of about through physic where there's about 250 000 of uh deposits are insured by the physics system now it was felt that this would not be enough to avert the crisis on further back so the for the first time in a long period this Federal Federal Reserve has invoked the systemic risk exception so there's obviously a fair there's a systemic risk and we are beginning to see that as you've mentioned Signature Bank uh Federal uh the Federal Bank all of these things now on top of that we have had the Credit Suisse debacle now we have seen something like 120 billion dollars of deposits being withdrawn from Credit Suisse the Central Bank of Switzerland has come and allowed a credit line of 50 billion now it remains to be seen if we have averted the crisis uh the noise is the right one being made the fact that 30 billion dollars have come through the major banks in the the U.S to support the Federal Bank all of that is is good news but it really remains to be seen whether we have averted the crisis because there's jitteriness among the depositors the smaller banks are seeing some deposits being withdrawn you see one day shares going up then the next day you are against these shares sliding down so I think it's a bit early to say whether the crisis has been averted uh the fact of the matter is the depositors are nervous about the smaller Banks all over and because some of the lending policies have been very liberal and and there is concern that whether these smaller banks will be able to sustain the the the the crisis there is and as you mentioned there's the self-fulfilling promise issue that uh the the fact that people fear that there's going to be a a a collapse they've draw money and that leads to the collapse anyway so I I think it's good measures that have been taken by the Federal Reserve Bank in the U.S the Swiss Central Bank but it remains to be seen whether or the crisis whether in credit suis or the other smaller banks in the U.S has been completely averted so uh will these bailouts that are now happening incentivize risky behavior and you know Foster uh what is called too big a bank to fail mentality I think I think we are already beginning we're already seeing some effect of that the fact that in 2008 the two big uh too do big to fail predominant happened and there was a major pumping in of liquidity by The Reserve Bank in the U.S as well as other Banks across the world has probably fostered this uh attitudes towards uh being a bit careless about lending policies even though they were strengthening and there was quite a lot of measures taken to avoid it but the very factor of the matter that we are seeing what we are seeing with SVP and other Banks suggests that uh that that there has been a sort of fostering of uh careless policies by the Banks themselves and now as I said I do not want to be one of those who actually promote the idea of self-fulfilling promise I would like to think that the measures taken by the central bank as both in Switzerland and the Us and other Banks across the world will now contain the crisis uh but the contagion is there there is fear among the positives and we are seeing withdrawals I mean Swiss credit Swiss we saw a withdrawal of something like 120 billion dollars of uh deposits being taken out you're saying the U.S signature bank so that is the problem the depositors need to be somehow calmed we are not sure we have really crossed that bridge yet so uh uh let's explore that point a little bit further what does this mean what we are witnessing now to the businesses with the deposits in these Banks what should they do that's that's a really tricky question I I would want to advise every businessman not not to start not participate in the crisis and not withdraw uh their their funds especially given the support that we are seeing from the Federal Reserves as well as the larger Banks but having said that uh it is for the individual businesses to decide uh you do not want to precipitate a crisis but uh obviously the the businesses and and individuals have to take their own uh their own decisions and and given that there is some degree of uh concern about the lending policies and the riskiness of uh assets there is on on the books of any of these Banks uh obviously every every depositor every business has to take its own decision and and and and they should be talking to experts as to the health of the balance sheets of individual Banks yes one final question to you yes sir so uh sorry one final question this was very careless and and and and we are seeing the consequences of that yes uh so will Banks once again get away without being punished for what some call too risky a behavior you know the thing is the problem is that if banks get punished the whole world gets punished we all get punished economy is going to a slump there could be a major recession we have just come out of covet so while there is a inclination that you want to see a better Behavior by the Banks we certainly want to avoid punishment because that would punish all of us all right Mr Hassan thanks very much for speaking with Beyond joining us from Islamabad and welcome our top focus of this are the collapse of Silicon Valley Bank last week raised questions about what else might be lurking in a wider system within days the market turmoil and snare Swiss lender credly Swiss forcing it to borrow up to 54 billion dollars from Switzerland central bank now large U.S banks have injected 30 billion dollars in deposits into First Republic Bank U.S banks have rushed to the rescue of First Republic Bank the lender is caught up in a widening crisis triggered by the collapse of two other mid-sized U.S lenders over the past week only say investors are fretting about potential runs on global bank deposits with contagion torque sweeping across trading floors yesterday while three's giant credit suis announced boring to show up liquidity the spotlight shifted back to the United States the shares of First Republic a regional lender had tumbled 70 in the first nine trading sessions some of the biggest u s banking names including JP Morgan Chase City Group Bank of America Wells Fargo Goldman Sachs and Morgan Stanley are involved in the rescue U.S regulator Sage the show of supporters most welcome ensures the resilience of the banking system foreign this week's actions demonstrate our Resolute commitment to ensure that our financial system remains strong and that depositors savings remain safe First Republic Bank is not the first Canary in the mind but there are canaries that are now feet up and those include things like Silicon Valley Bank Signature Bank and lots of worry about Credit Suisse the storage financial institution in a market all prophecies are self-fulfilling so if people begin to feel like a bank is going to fail they pull their money and they tell everyone this bank is going to fail and almost no matter how stable the bank was when the Story begins this begins to sap the confidence deny the assets and create a situation where also none of the other players in the market want to stand next to you or want to do business with you around on financing on Sunday rates through JP Morgan and had given fast Republic access to 70 billion dollars in funds but that failed to come investors worries of a contagion deepen through the demise of Signature Bank to follow that of Silicon Valley and deposits has begun moving costs to larger lenders First Republic Banks stock closed up 10 percent on news of the rescue but its shares fell 18 after after market trading after the bank said it would suspend its dividend the use of the rescue also helped boost wall Street's indices smaller Banks also rebounded from the recent sell-off the Federal Reserve has lent U.S banks nearly 12 billion dollars and a new one-year lending program unveiled on Sunday U.S treasury secretary said authorities moved swiftly to protect depositors at Silicon Valley Bank and Signature Bank she said authorities acted when they saw a serious risk of contingent that could have triggered runs on many bunks will we felt that there was a serious risk of contagion that could have brought down and triggered runs on many banks and that something given that our judgment is that the banking system overall is safe and sound depositors should have confidence in the system and we took these actions asked by the U.S Central Bank the totally outstanding amount of advances under the bankster and funding program reached 11.9 billion dollars on by Wednesday our top story the collapse of Silicon Valley Bank last week raised questions about what else might be lurking in the wider system within days the market turmoil ensnared Switz lender credit Suites forcing it to borrow up to 54 billion dollars from Switzerland's central bank now large U.S banks have injected 30 billion dollars in deposits into First Republic Bank U.S banks have rushed to the rescue of the First Republic Bank the lender is caught up in a widening crisis triggered by the collapse of two other mid-sized U.S lenders over the past week analysts say that investors are fretting about potential runs on global bank deposits with contagion talks sweeping across trading floors yesterday while Swiss joined Credit Suisse announced borrowing to shore up liquidity the spotlight shifted back to the United States the shares of First Republic a regional lender had tumbled 70 percent in the last nine trading sessions some of the biggest U.S banking names including JPMorgan Chase Citigroup Bank of America Wells Fargo Goldman Sachs and Morgan Stanley are involved in the rescue U.S Regulators said that the show of support was most welcome and shows the resilience of the banking system this week's actions demonstrate our Resolute commitment to ensure that our financial system remains strong and the depositors savings remain safe First Republic Bank is not the first Canary in the mind but there are canaries that are now feet up and those include things like Silicon Valley Bank Signature Bank and lots of worry about Credit Suisse the storage financial institution in a market all prophecies are self-fulfilling so if people begin to feel like a bank is going to fail they pull their money and they tell everyone this bank is going to fail and almost no matter how stable the bank was when the Story begins this begins to sap the confidence deny the assets and create a situation where also none of the other players in the market want to stand next to you or want to do business with you a round of financing on Sunday raised through JP Morgan had given First Republic access to 70 billion dollars in funds but that failed to come the investors worries of a contagion deepened with the demise of Signature Bank to follow that of Silicon Valley Bank and depositors began moving cash to larger lenders First Republic Banks stock closed up 10 on news of the rescue but it shares fell 18 in aftermarket trading after the bank said that it would suspend its dividend news of the rescue also helped boost Wall Street for indices smaller Banks also rebounded from the recent sell-off the Federal Reserve has lent U.S banks nearly 12 billion dollars under a new one-year lending program that was unveiled on Sunday night U.S treasury secretary said that authorities moved swiftly to protect depositors at Silicon Valley Bank and Signature Bank she said that authorities acted when they saw a serious risk of contagion that could have triggered runs on many banks well we felt that there was a serious risk of contagion that could have brought down and triggered runs on many banks and that something given that our judgment is that the banking system overall is safe and sound depositors should have confidence in the system and we took these actions as per the United States Central Bank the total outstanding amount of advances under the bank term funding program reached 11.9 billion dollars on Wednesday for more on this we are now being joined by Syed Javed Hassan who is an economic columnist and former chairman of the economic Advisory Group Mr Hassan is joining us from Islamabad sir thank you very much for speaking with weon thank you very much for having me so Banks coming to the rescue of banks first Swiss Central Bank rescues Credit Suisse now Consortium of 11 banks have come to the rescue of First Republic is the crisis averted or does it run deep well we should start with the Silicon Valley Bank for that the Federal Reserve had to invoke the risk and systemic risk risk as an exception for depositors now let me explain this a bit the U.S banks have a insurance policy of about through physic where there's about 250 000 of uh deposits are insured by the physics system now it was felt that this would not be enough to avert the crisis on further back so the for the first time in a long period this Federal Federal Reserve has invoked the systemic risk exception so there's obviously a fair there's a systemic risk and we are beginning to see that as you mentioned Signature Bank uh Federal uh the Federal Bank all of these things now on top of that we have had the Credit Suisse debacle now we have seen something like 120 billion dollars of deposits being withdrawn from Credit Suisse the Central Bank of Switzerland has come and allowed a credit line of 50 billion now it remains to be seen if we have averted the crisis uh the noise is the right one being made the fact that 30 billion dollars have come through the major banks in the the US to support the Federal Bank all of that is is good news but it really remains to be seen whether we have averted the crisis because there's jitteriness among the depositors the smaller banks are seeing some deposits being withdrawn you see one day shares going up then the next day you are against these shares sliding down so I think it's a bit early to say whether the crisis has been averted uh the fact of the matter is the depositors are nervous about the smaller Banks all over and because some of the lending policies have been very liberal and and there is concern that whether these smaller banks will be able to sustain the the the crisis there is and as you mentioned and there's the self-fulfilling promise issue that uh the the fact that people fear that there's going to be a a a collapse they withdraw money and that leads to the collapse anyway so I I think it's good measures that have been taken by the Federal Reserve Bank in the U.S the Swiss Central Bank but it remains to be seen whether or the crisis whether in credit suis or the other smaller banks in the U.S has been completely averted so uh will these bailouts that are now happening incentivize risky behavior and you know Foster uh what is called too big a bank to fail mentality I think I think we are already beginning we're already seeing some effect of that the fact that in 2008 the two big uh too too big to fail predominant happen and there was a major pumping in of liquidity by The Reserve Bank in the U.S as well as other Banks across the world has probably fostered this uh attitudes towards uh being a bit careless about lending policies even though they were strengthening and there was quite a lot of measures taken to avoid it but the very factor of the matter that we are seeing what we are seeing with SVP and other Banks suggests that uh that that there has been a sort of fostering of uh careless policies by the Banks themselves and now as I said I do not want to be one of those who actually promote the idea of self-fulfilling promise I would like to think that the measures taken by the central bank as both in Switzerland and the Us and other Banks across the world will now contain the crisis uh but the contagion is there there is fear among the positives and we are seeing withdrawals I mean Swiss credit students we saw a withdrawal of something like 120 billion dollars of uh deposits being taken out you're saying similarly in the U.S signature bank so that is the problem the depositors need to be somehow calmed we are not sure we have really crossed that bridge yet so uh uh let's explore that point a little bit further what does this mean what we are witnessing now to the businesses with the deposits in these Banks what should they do that's that's a really tricky question I I would want to advise every businessman not not to start not participate in the crisis and not withdraw uh their their funds especially given the support that we are seeing from the Federal Reserves as well as the larger Banks but having said that uh it is for the individual businesses to decide uh you do not want to precipitate a crisis but uh obviously the the businesses and and individuals have to take their own uh their own decisions and and given that there is some degree of uh concern about the lending policies and the riskiness of uh assets there is on on the books of any of these Banks uh obviously every every depositor every business has to take its own decision and and and and they should be talking to experts as to the health of the balance sheets of individual Banks yes one final question to you yes sir sir sorry one final question and and we are seeing the consequences of that yes uh so will Banks once again get away without being punished for what some call too riskier Behavior you know the thing is the problem is that if banks get punished the whole world gets punished we all get punished economy is going to a slump there could be a major recession we have just come out of covet so while there is a inclination that you want to see a better Behavior by the Banks we certainly want to avoid punishment because that would punish all of us all right Mr Hassan thanks very much for speaking with Beyond joining us from Islamabad and welcome our top focus of this are the collapse of Silicon Valley Bank last week raised questions about what else might be lurking in a wider system within days the market turmoil and snare Swiss blender Credit Suisse forcing it to borrow up to 54 billion dollars from Switzerland central bank now large U.S banks have injected 30 billion dollars in deposits into First Republic Bank U.S banks have rushed to the rescue of First Republic Bank the lender is caught up in a widening crisis triggered by the collapse of two other mid-sized U.S lenders over the past week only say investors are fretting about potential runs on global bank deposits with contagion torque sweeping across trading floors yesterday while three's giant Credit Suisse announced boring to show up liquidity the spotlight shifted back to the United States the shares of First Republic a regional lender had tumbled 70 in the first nine trading sessions some of the biggest U.S banking names including JP Morgan Chase City Group Bang Bank of America Wells Fargo Goldman Sachs and Morgan Stanley are involved in the rescue U.S Regulators said the show of supporters most welcome ensures the resilience of the banking system foreign this week's actions demonstrate our Resolute commitment to ensure that our financial system remains strong and the depositor's savings remain safe First Republic Bank is not the first Canary in the mind but there are canaries that are now feet up and those include things like Silicon Valley Bank Signature Bank and lots of worry about Credit Suisse the storage financial institution in a market all prophecies are self-fulfilling so if people begin to feel like a bank is going to fail they pull their money and they tell everyone this bank is going to fail and almost no matter how stable the bank was when the Story begins this begins to sap the confidence deny the assets and create a situation where also none of the other players in the market want to stand next to you or want to do business with you around on financing on Sunday rates through JP Morgan and had given fast Republic access to 70 billion dollars in funds but that failed to come investors worries of a contagion deepen through the demise of Signature Bank to follow that of Silicon Valley and deposits has begun moving costs to larger lenders First Republic Banks stock closed up 10 percent on news of the rescue but its shares fell 18 after after market trading after the bank said it would suspend its dividend the use of the rescue also helped boost wall Street's indices smaller Banks also rebounded from the recent sell-off the Federal Reserve has lent U.S banks nearly 12 billion dollars and a new one-year lending program unveiled on Sunday U.S treasury secretary said authorities moved swiftly to protect depositors at Silicon Valley Bank and Signature Bank she said authorities acted when they saw a serious risk of contingent that could have triggered runs on many bunks will we felt that there was a serious risk of contagion that could have brought down and triggered runs on many banks and that something given that our judgment is that the banking system overall is safe and sound depositors should have confidence in the system and we took these actions asked by the U.S Central Bank the tortellin outstanding amount of advances under the bankster and funding program reached 11.9 billion dollars on by Wednesday our top story the collapse of Silicon Valley Bank last week raised questions about what else might be lurking in the wider system within days the market turmoil ensnared Switz lender credit Suites forcing it to borrow up to 54 billion dollars from Switzerland's central bank now large U.S banks have injected 30 billion dollars in deposits into First Republic Bank U.S banks have rushed to the rescue of the First Republic Bank the lender is caught up in a widening crisis triggered by the collapse of two other mid-sized U.S lenders over the past week analysts say that investors are fretting about potential runs on global bank deposits with contagion talks sweeping across trading floors yesterday while Swiss joined Credit Suisse announced borrowing to shore up liquidity the spotlight shifted back to the United States the shares of First Republic a regional lender had tumbled 70 percent in the last nine trading sessions some of the biggest U.S banking names including JPMorgan Chase Citigroup Bank of America Wells Fargo Goldman Sachs and Morgan Stanley are involved in the rescue U.S Regulators said that the show of support was most welcome and shows the resilience of the banking system this week's actions demonstrate our Resolute commitment to ensure that our financial system remains strong and the depositor's savings remain safe First Republic Bank is not the first Canary in the mind but there are canaries that are now feed up and those include things like Silicon Valley Bank Signature Bank and lots of worry about Credit Suisse the storage financial institution in a market all prophecies are self-fulfilling so if people begin to feel like a bank is going to fail they pull their money and they tell everyone this bank is going to fail and almost no matter how stable the bank was when the Story begins this begins to sap the confidence deny the assets and create a situation where also none of the other players in the market want to stand next to you or want to do business with you a round of financing on Sunday raised through JP Morgan had given First Republic access to 70 billion dollars in funds but that fails to come the investors worries of a contagion deepened with the demise of Signature Bank to follow that of Silicon Valley Bank and depositors began moving cash to larger lenders First Republic Banks stock closed up 10 on news of the rescue but it shares fell 18 in aftermarket trading after the bank said that it would suspend its dividend news of the rescue also helped boost Wall Street for indices smaller Banks also rebounded from the recent sell-off the Federal Reserve has lent U.S banks nearly 12 billion dollars under a new one-year lending program that was unveiled on Sunday night U.S treasury secretary said that authorities moved swiftly to protect depositors at Silicon Valley Bank and Signature Bank she said that authorities acted when they saw a serious risk of contagion that could have triggered runs on many banks well we felt that there was a serious risk of contagion that could have brought down and triggered runs on many banks and that something given that our judgment is that the banking system overall is safe and sound depositories should have confidence in the system and we took these actions as for the United States Central Bank the total outstanding amount of advances under the bank term funding program reached 11.9 billion dollars on Wednesday for more on this we are now being joined by Syed Javed Hassan who is an economic columnist and former chairman of the economic Advisory Group Mr Hassan is joining us from Islamabad sir thank you very much for speaking with weon thank you very much for having me so Banks coming to the rescue of banks first Swiss Central Bank rescues credit space now Consortium of 11 banks have come to the rescue of First Republic is the crisis averted or does it run deep well we should start with the Silicon Valley Bank for that the Federal Reserve had to invoke the risk and systemic risk risk as an exception for depositors now let me explain this a bit the U.S banks have a insurance policy of about through physic where there's about 250 000 of uh deposits are insured by the physics system now it was felt that this would not be enough to avert the crisis on further back so the for the first time in a long period these Federal Federal Reserve has invoked the systemic risk exception so there's obviously a fair there's a systemic risk and we are beginning to see that as you mentioned Signature Bank uh Federal uh the Federal Bank all of these things now on top of that we have had the Credit Suisse debacle now we have seen something like 120 billion dollars of deposits being withdrawn from Credit Suisse the Central Bank of Switzerland has come and allowed a credit line of 50 billion now it remains to be seen if we have averted the crisis uh the noise is the right one being made the fact that 30 billion dollars have come through the major banks in the the US to support the Federal Bank all of that is is good news but it really remains to be seen whether we have averted the crisis because there's jitteriness among the depositors the smaller banks are seeing some deposits being withdrawn you see one day shares going up then the next day you are against these shares sliding down so I think it's a bit early to say whether the crisis has been averted uh the fact of the matter is the depositors are nervous about the smaller Banks all over and because some of the lending policies have been very liberal and and there is concern that whether these smaller banks will be able to sustain the the the the crisis there is and as you mentioned and there's the self-fulfilling promise issue that uh the the fact that people fear that there's going to be a a a collapse they withdraw money and that leads to the collapse anyway so uh I think it's good measures that have been taken by the Federal Reserve Bank in the U.S the Swiss Central Bank but it remains to be seen whether or the crisis whether in Credit Suisse or the other smaller banks in the U.S has been completely averted so uh will these bailouts that are now happening incentivize risky behavior and you know Foster uh what is called too big a bank to fail mentality I think I think we are already beginning we're already seeing some effect of that the fact that in 2008 the two big uh too too big to fail predominant happened and there was a major pumping in of liquidity by The Reserve Bank in the U.S as well as other Banks across the world has probably fostered this uh attitudes towards uh being a bit careless about lending policies even though they were strengthening and there was quite a lot of measures taken to avoid it but the very factor of the matter that we are seeing what we are seeing with SVP and other Banks suggests that uh that that there has been a sort of fostering of uh careless policies by the Banks themselves and now as I said I do not want to be one of those who actually promote the idea of self-fulfilling promise I would like to think that the measures taken by the central bank as both in Switzerland and the Us and other Banks across the world will now contain the crisis uh but the contagion is there there is fear among the positives and we are seeing withdrawals I mean Swiss credit Swiss we saw a withdrawal of something like 120 billion dollars of uh deposits being taken out you're saying in the U.S signature bank so that is the problem the depositors need to be somehow calmed we are not sure we have really crossed that bridge yet so uh uh let's explore that point a little bit further what does this mean what we are witnessing now to the businesses with the deposits in these Banks what should they do that's that's a really tricky question I I would want to advise every businessman not not to start not participate in the crisis and not withdraw uh their their funds especially given the support that we are seeing from the Federal Reserves as well as the larger Banks but having said that uh it is for the individual businesses to decide uh you do not want to precipitate a crisis but uh obviously the the businesses and and individuals have to take their own uh their own decisions and and given that there is some degree of uh concern about the lending policies and the riskiness of uh assets there is on on the books of any of these Banks uh obviously every every depositor every business has to take its own decision and and and and they should be talking to experts as to the health of the balance sheets of individual Banks yes one final question to you yes sir uh sorry one final question this was very careless and and and and we are seeing the consequences of that yes uh so will Banks once again get away without being punished for what some call a too riskier Behavior you know the thing is the problem is that if banks get punished the whole world gets punished we all get punished economy is going to a slump there could be a major recession we have just come out of covet so while there is a inclination that you want to see a better Behavior by the Banks we certainly want to avoid punishment because that would punish all of us all right Mr Hassan thanks very much for speaking with Beyond joining us from Islamabad and welcome our top focus of this are the collapse of Silicon Valley Bank last week raised questions about what else might be lurking in the wider system within days the market turmoil and snare Swiss blender Credit Suisse forcing it to borrow up to 54 billion dollars from Switzerland central bank now large U.S banks have injected 30 billion dollars in deposits into First Republic Bank U.S banks have rushed to the rescue of First Republic Bank the lender is caught up in a widening crisis triggered by the collapse of two other mid-sized U.S lenders over the past week only say investors are fretting about potential runs on global bank deposits with contagion torque sweeping across trading floors yesterday while three's giant Credit Suisse announced boring to show up liquidity the spotlight shifted back to the United States the shares of First Republic a regional lender had tumbled 70 in the first nine trading sessions some of the biggest U.S banking names including JP Morgan Chase City Group Bank of America Wells Fargo Goldwyn socks and Morgan Stanley are involved in the rescue U.S Regulators said the show of support is most welcome ensures the resilience of the banking system foreign this week's actions demonstrate our Resolute commitment to ensure that our financial system remains strong and that depositors savings remain safe First Republic Bank is not the first Canary in the mind but there are canaries that are now feet up and those include things like Silicon Valley Bank Signature Bank and lots of worry about Credit Suisse the storage financial institution in a market all prophecies are self-fulfilling so if people begin to feel like a bank is going to fail they pull their money and they tell everyone this bank is going to fail and almost no matter how stable the bank was when the Story begins this begins to sap the confidence deny the assets and create a situation where also none of the other players in the market want to stand next to you or want to do business with you around on financing on Sunday raised through JP Morgan and had given fast Republic access to 70 billion dollars in funds but that failed to come investors worries of a contingent deepen through the demise of Signature Bank to follow that of Silicon Valley and deposits has begun moving costs to larger lenders First Republic Banks stock closed up 10 percent on news of the rescue but its shares fell 18 after after market trading after the bank said it would suspend its dividend the use of the rescue also helped to boost wall Street's indices smaller Banks also rebounded from the recent sell-off the Federal Reserve has lent U.S banks nearly 12 billion dollars and a new one-year lending program unveiled on Sunday U.S treasury secretary said authorities moved swiftly to protect depositors at Silicon Valley Bank and Signature Bank she said authorities acted when they saw a serious risk of contagion that could have triggered runs on many bunks will we felt that there was a serious risk of contagion that could have brought down and triggered runs on many banks and that something given that our judgment is that the banking system overall is safe and sound depositors should have confidence in the system and we took these actions asked by the U.S Central Bank the totally outstanding amount of advances under the bankster and funding program reached 11.9 billion dollars on by Wednesday our top story the collapse of Silicon Valley Bank last week raised questions about what else might be lurking in the wider system within days the market turmoil ensnared Switz lender credit Suites forcing it to borrow up to 54 billion dollars from Switzerland's central bank now large U.S banks have injected 30 billion dollars in deposits into First Republic Bank U.S banks have rushed to the rescue of the First Republic Bank the lender is caught up in a widening crisis triggered by the collapse of two other mid-sized U.S lenders over the past week analysts say that investors are fretting about potential runs on global bank deposits with contagion talks sweeping across trading floors yesterday while Swiss joined Credit Suisse announced borrowing to shore up liquidity the spotlight shifted back to the United States the shares of First Republic a regional lender had tumbled 70 percent in the last nine trading sessions some of the biggest U.S banking names including JPMorgan Chase Citigroup Bank of America Wells Fargo Goldman Sachs and Morgan Stanley are involved in the rescue U.S Regulators said that the show of support was most welcome and shows the resilience of the banking system this week's actions demonstrate our Resolute commitment to ensure that our financial system remains strong and the depositors savings remain safe First Republic Bank is not the first Canary in the mind but there are canaries that are now feed up and those include things like Silicon Valley Bank Signature Bank and lots of worry about Credit Suisse the storage financial institution in a market all prophecies are self-fulfilling so if people begin to feel like a bank is going to fail they pull their money and they tell everyone this bank is going to fail and almost no matter how stable the bank was when the Story begins this begins to sap the confidence deny the assets and create a situation where also none of the other players in the market want to stand next to you or want to do business with you a round of financing on Sunday raised through JP Morgan had given First Republic access to 70 billion dollars in funds but that failed to come the investors worries of a contagion deepened with the demise of Signature Bank to follow that of Silicon Valley Bank and depositors began moving cash to larger lenders First Republic Banks stock closed up 10 on news of the rescue but it shares fell 18 in aftermarket trading after the bank said that it would suspend its dividend news of the rescue also helped to boost Wall Street for indices smaller Banks also rebounded from the recent sell-off the Federal Reserve has lent U.S banks nearly 12 billion dollars under a new one-year lending program that was unveiled on Sunday night U.S treasury secretary said that authorities moved swiftly to protect depositors at Silicon Valley Bank and Signature Bank she said that authorities acted when they saw a serious risk of contagion that could have triggered runs on many banks well we felt that there was a serious risk of contagion that could have brought down and triggered runs on many banks and that something given that our judgment is that the banking system overall is safe and sound depositories should have confidence in the system and we took these actions as per the United States Central Bank the total outstanding amount of advances under the bank term funding program reached 11.9 billion dollars on Wednesday for more on this we are now being joined by Syed Javed Hassan who is an economic columnist and former chairman of the economic Advisory Group Mr Hassan is joining us from Islamabad sir thank you very much for speaking with weon thank you very much for having me so Banks coming to the rescue of banks first Swiss Central Bank rescues Credit Suisse now Consortium of 11 banks have come to the rescue of First Republic is the crisis averted or does it run deep well we should start with the Silicon Valley Bank for that the Federal Reserve had to invoke the risk and systemic risk risk as an exception for depositors now let me explain this a bit the U.S banks have a insurance policy of about through physic where there's about 250 000 of uh deposits are insured by the physics system now it was felt that this would not be enough to avert the crisis on further back so the for the first time in a long period this Federal Federal Reserve has invoked the systemic risk exception so there's obviously a fair there's a systemic risk and we are beginning to see that as you've mentioned Signature Bank uh Federal uh the Federal Bank all of these things now on top of that we have had the Credit Suisse debacle now we have seen something like 120 billion dollars of deposits being withdrawn from Credit Suisse the Central Bank of Switzerland has come and allowed a credit line of 50 billion now it remains to be seen if we have averted the crisis uh the noise is the right one being made the fact that 30 billion dollars have come through the major banks in the the US to support the Federal Bank all of that is is good news but it really remains to be seen whether we have averted the crisis because there's jitteriness among the depositors the smaller banks are seeing some deposits being withdrawn you see one day shares going up then the next day you're against these shares sliding down so I think it's a bit early to say whether the crisis has been averted uh the fact of the matter is the depositors are nervous about the smaller Banks all over and because some of the lending policies have been very liberal and and there's concern that whether these smaller banks will be able to sustain the the the crisis there is and as you mentioned there's the self-fulfilling promise issue that uh the the fact that people fear that there's going to be a a a collapse they've withdraw money and that leads to the collapse anyway so uh I think it's good measures that have been taken by the Federal Reserve Bank in the U.S the Swiss Central Bank but it remains to be seen whether or the crisis whether in credit suis or the other smaller banks in the U.S has been completely averted so uh will these bailouts that are now happening incentivize risky behavior and you know Foster uh what is called too big a bank to fail mentality I think I think we are already beginning we're already seeing some effect of that the fact that in 2008 the two big uh too do big to fill for dominant happen and there was a major pumping in of liquidity by The Reserve Bank in the U.S as well as other Banks across the world has probably fostered this uh attitudes towards uh being a bit careless about lending policies even though they were strengthening and there was quite a lot of measures taken to avoid it but the very factor of the matter that we are seeing what we are seeing with SVP and other Banks suggests that uh that that there has been a sort of fostering of uh careless policies by the Banks themselves and now as I said I do not want to be one of those who actually promote the idea of self-fulfilling promise I would like to think that the measures taken by the central bank as both in Switzerland and the Us and other Banks across the world will now contain the crisis uh but the contagion is there there is fear among the positives and we are seeing withdrawals I mean Swiss credit Swiss we saw a withdrawal of something like 120 billion dollars of uh deposits being taken out you're saying in the U.S signature bank so that is the problem the depositors need to be somehow calmed we are not sure we have really crossed that bridge yet so uh uh let's explore that point a little bit further what does this mean what we are witnessing now to the businesses with the deposits in these Banks what should they do that's that's a really tricky question I I would want to advise every businessman not not to start not participate in the crisis and not withdraw uh their their funds especially given the support that we are seeing from the Federal Reserves as well as the larger Banks but having said that uh it is for the individual businesses to decide uh you do not want to precipitate a crisis but uh obviously the the businesses and and individuals have to take their own uh their own decisions and and given that there is some degree of uh concern about the lending policies and the riskiness of uh assets there is on on the books of any of these Banks uh obviously every every depositor every business has to take its own decision and and and and they should be talking to experts as to the health of the balance sheets of individual Banks yes one final question to you yes sir sir sorry one final question and and we are seeing the consequences of that yes uh so will Banks once again get away without being punished for what some call a too riskier Behavior you know the thing is the problem is that if banks get punished the whole world gets punished we all get punished economy is going to a slump there could be a major recession we have just come out of covet so while there is a inclination that you want to see a better Behavior by the Banks we certainly want to avoid punishment because that would punish all of us all right Mr Hassan thanks very much for speaking with Beyond joining us from Islamabad and welcome our top focus of this are the collapse of Silicon Valley Bank last week raised questions about what else might be lurking in a wider system within days the market turmoil and snare Swiss blender Credit Suisse forcing it to borrow up to 54 billion dollars from Switzerland central bank now large U.S banks have injected 30 billion dollars in deposits into First Republic Bank U.S banks have rushed to the rescue of First Republic Bank the lender is caught up in a widening crisis triggered by the collapse of two other mid-sized U.S lenders over the past week only say investors are fretting about potential rounds on global bank deposits with contagion torque sweeping across trading floors yesterday while three's giant Credit Suisse announced boring to show up liquidity the spotlight shifted back to the United States the shares of First Republic a regional lender had tumbled 70 in the first nine trading sessions some of the biggest U.S banking names including JP Morgan Chase City Group Bank of America Wells Fargo Goldman Sachs and Morgan Stanley are involved in the rescue U.S Regulators said the show of supporters most welcome and shows the resilience of the banking system foreign this week's actions demonstrate our Resolute commitment to ensure that our financial system remains strong and that depositors savings remain safe First Republic Bank is not the first Canary in the mind but there are canaries that are now feet up and those include things like Silicon Valley Bank Signature Bank and lots of worry about Credit Suisse the storage financial institution in a market all prophecies are self-fulfilling so if people begin to feel like a bank is going to fail they pull their money and they tell everyone this bank is going to fail and almost no matter how stable the bank was when the Story begins this begins to sap the confidence deny the assets and create a situation where also none of the other players in the market want to stand next to you or want to do business with you around on financing on Sunday rates through JP Morgan and had given fast Republic access to 70 billion dollars in funds but that failed to come investors worries of a contingent deepen through the demise of Signature Bank to follow that of Silicon Valley and deposits has begun moving costs to larger lenders First Republic Banks stock closed up 10 percent on news of the rescue but its shares fell 18 after after market trading after the bank said it would suspend its dividend the use of the rescue also helped boost wall Street's indices smaller Banks also rebounded from the recent sell-off the Federal Reserve has lent U.S banks nearly 12 billion dollars and a new one-year lending program unveiled on Sunday U.S treasury secretary said authorities moved swiftly to protect depositors at Silicon Valley Bank and Signature Bank she said authorities acted when they saw a serious risk of contingent that could have triggered rounds on many bunks will we felt that there was a serious risk of contagion that could have brought down and triggered runs on many banks and that something given that our judgment is that the banking system overall is safe and sound depositors should have confidence in the system and we took these actions asked by the U.S Central Bank the totally outstanding amount of advances under the bankster and funding program reached 11.9 billion dollars on by Wednesday our top story the collapse of Silicon Valley Bank last week raised questions about what else might be lurking in the wider system within days the market turmoil ensnared Switz lender credit Suites forcing it to borrow up to 54 billion dollars from Switzerland's central bank now large U.S banks have injected 30 billion dollars in deposits into First Republic Bank U.S banks have rushed to the rescue of the First Republic Bank the lender is caught up in a widening crisis triggered by the collapse of two other mid-sized U.S lenders over the past week analysts say that investors are fretting about potential runs on global bank deposits with contagion talks sweeping across trading floors yesterday while Swiss joined Credit Suisse announced borrowing to shore up liquidity the spotlight shifted back to the United States the shares of First Republic a regional lender had tumbled 70 percent in the last nine trading sessions some of the biggest U.S banking names including JPMorgan Chase Citigroup Bank of America Wells Fargo Goldman Sachs and Morgan Stanley are involved in the rescue U.S Regulators said that the show of support was most welcome and shows the resilience of the banking system this week's actions demonstrate our Resolute commitment to ensure that our financial system remains strong and the depositors savings remain safe First Republic Bank is not the first Canary in the mind but there are canaries that are now feet up and those include things like Silicon Valley Bank Signature Bank and lots of worry about Credit Suisse the storage financial institution in a market all prophecies are self-fulfilling so if people begin to feel like a bank is going to fail they pull their money and they tell everyone this bank is going to fail and almost no matter how stable the bank was when the Story begins this begins to sap the confidence deny the assets and create a situation where also none of the other players in the market want to stand next to you or want to do business with you a round of financing on Sunday raised through JP Morgan had given First Republic access to 70 billion dollars in funds but that fails to come the investors worries of a contagion deepened with the demise of Signature Bank to follow that of Silicon Valley Bank and depositors began moving cash to larger lenders First Republic Banks stock closed up 10 on news of the rescue but its shares fell 18 in aftermarket trading after the bank said that it would suspend its dividend news of the rescue also helped boost Wall Street for indices smaller Banks also rebounded from the recent sell-off the Federal Reserve has lent U.S banks nearly 12 billion dollars under a new one-year lending program that was unveiled on Sunday night U.S treasury secretary said that authorities moved swiftly to protect depositors at Silicon Valley Bank and Signature Bank she said that authorities acted when they saw a serious risk of contagion that could have triggered runs on many banks well we felt that there was a serious risk of contagion that could have brought down and triggered runs on many banks and that something given that our judgment is that the banking system overall is safe and sound depositors should have confidence in the system and we took these actions as per the United States Central Bank the total outstanding amount of advances under the bank term funding program reached 11.9 billion dollars on Wednesday for more on this we are now being joined by Syed Javed Hassan who is an economic columnist and former chairman of the economic Advisory Group Mr Hassan is joining us from Islamabad sir thank you very much for speaking with weon thank you very much for having me so Banks coming to the rescue of banks first Swiss Central Bank rescues Credit Suisse now Consortium of 11 banks have come to the rescue of First Republic is the crisis averted or does it run deep well we should start with the Silicon Valley Bank for that the Federal Reserve had to invoke the risk and systemic risk risk as an exception for depositors now let me explain this a bit the U.S banks have a insurance policy of about through physic where there's about 250 000 of uh deposits are insured by the physics system now it was felt that this would not be enough to avert the crisis on further back so the for the first time in a long period this Federal Federal Reserve has invoked the systemic risk exception so there's obviously a fair there's a systemic risk and we are beginning to see that as you mentioned Signature Bank uh Federal the Federal Bank all of these things now on top of that we have had the Credit Suisse debacle now we have seen something like 120 billion dollars of deposits being withdrawn from Credit Suisse the Central Bank of Switzerland has come and allowed a credit line of 50 billion now it remains to be seen if we have averted the crisis uh the noise is the right one being made the fact that 30 billion dollars have come through the major banks in the the US to support the Federal Bank all of that is is good news but it really remains to be seen whether we have averted the crisis because there's jitteriness among the depositors the smaller banks are seeing some deposits being withdrawn you see one day shares going up then the next day you're against these shares sliding down so I think it's a bit early to say whether the crisis has been averted uh the fact of the matter is the depositors are nervous about the smaller Banks all over and because some of the lending policies have been very liberal and and there is concern that whether these smaller banks will be able to sustain the the the crisis there is and as you mentioned and there's the self-fulfilling promise issue that uh the the fact that people fear that there's going to be a a a collapse they withdraw money and that leads to the collapse anyway so uh I think it's good measures that have been taken by the Federal Reserve Bank in the U.S the Swiss Central Bank but it remains to be seen whether or the crisis whether in credit suis or the other smaller banks in the U.S has been completely averted so uh build these bailouts that are now happening incentivize risky behavior and you know Foster uh what is called too big a bank to fail mentality I think I think we are already beginning we're already seeing some effect of that the fact that in 2008 the two big uh to do big to fail for dominant happen and there was a major pumping in of liquidity by The Reserve Bank in the US as well as other Banks across the world has probably fostered this uh attitudes towards uh being a bit careless about lending policies even though they were strengthening and there was quite a lot of measures taken to avoid it but the very factor of the matter that we are seeing what we are seeing with SVP and other Banks suggests that uh that that there has been a sort of fostering of uh careless policies by the Banks themselves and now as I said I do not want to be one of those who actually promote the idea of self-fulfilling promise I would like to think that the measures taken by the central bank as both in Switzerland and the Us and other Banks across the world will now contain the crisis uh but the contagion is there there is fear among the positives and we are seeing withdrawals I mean Swiss credit Swiss we saw a withdrawal of something like 120 billion dollars of uh deposits being taken out you're saying in the U.S signature bank so that is the problem the depositors need to be somehow calmed we are not sure we have really crossed that bridge yet so uh uh let's explore that point a little bit further what does this mean what we are witnessing now to the businesses with the deposits in these Banks what should they do that's that's a really tricky question I I would want to advise every businessman not not to start not participate in the crisis and not withdraw uh their their funds especially given the support that we are seeing from the Federal Reserves as well as the larger Banks but having said that uh it is for the individual businesses to decide uh you do not want to precipitate a crisis but uh obviously the the businesses and and individuals have to take their own uh their own decisions and and given that there is some degree of uh concern about the lending policies and the riskiness of uh assets there is on on the books of any of these Banks uh obviously every every depositor every business has to take its own decision and and and and they should be talking to experts as to the health of the balance sheets of individual Banks yes one final question to you yes sir uh sorry and we are seeing the consequences of that yes uh so will Banks once again get away without being punished for what some call a too riskier Behavior you know the thing is the problem is that if banks get punished the whole world gets punished we all get punished the economy is going to a slump there could be a major recession we have just come out of covet so while there is a inclination that you want to see a better Behavior by the Banks we certainly want to avoid punishment because that would punish all of us all right Mr Hassan thanks very much for speaking with Beyond joining us from Islamabad and welcome our top focus of this are the collapse of Silicon Valley Bank last week raised questions about what else might be lurking in the wider system within days the market turmoil and snared swiss lender Credit Suisse forcing it to borrow up to 54 billion dollars from Switzerland central bank now large U.S banks have injected 30 billion dollars in deposits into First Republic Bank U.S banks have rushed to the rescue of First Republic Bank the lender is caught up in a widening crisis triggered by the collapse of two other mid-sized U.S lenders over the past week only say investors are fretting about potential rounds on global bank deposits with contagion torque sweeping across trading floors yesterday while three's giant Credit Suisse announced boring to show up liquidity the spotlight shifted back to the United States the shares of First Republic a regional lender had tumbled 70 in the first nine trading sessions some of the biggest U.S banking names including JP Morgan Chase City Group Bank of America Wells Fargo Goldman Sachs and Morgan Stanley are involved in the rescue U.S regulator said the show of support is most welcome ensures the resilience of the banking system foreign this week's actions demonstrate our Resolute commitment to ensure that our financial system remains strong and the depositors savings remain safe First Republic Bank is not the first Canary in the mind but there are canaries that are now feed up and those include things like Silicon Valley Bank Signature Bank and lots of worry about Credit Suisse the storage financial institution in a market all prophecies are self-fulfilling so if people begin to feel like a bank is going to fail they pull their money and they tell everyone this bank is going to fail and almost no matter how stable the bank was when the Story begins this begins to sap the confidence deny the assets and create a situation where also none of the other players in the market want to stand next to you or want to do business with you around on financing on Sunday raised through JP Morgan and had given fast Republic access to 70 billion dollars in funds but that failed to come investors worries of a contagion dip in through the demise of Signature Bank to follow that of Silicon Valley and deposits has begun moving costs to larger lenders First Republic Banks stock closed up 10 percent on news of the rescue but its shares fell 18 after a after market trading after the bank said it would suspend its dividend the use of the rescue also helped boost wall Street's indices smaller Banks also rebounded from the recent sell-off the Federal Reserve has lent U.S banks nearly 12 billion dollars and a new one-year lending program unveiled on Sunday U.S treasury secretary said authorities moved swiftly to protect depositors at Silicon Valley Bank and Signature Bank she said authorities acted when they saw a serious risk of contingent that could have triggered runs on many bunks will we felt that there was a serious risk of contagion that could have brought down and triggered runs on many banks and that something given that our judgment is that the banking system overall is safe and sound depositors should have confidence in the system and we took these actions asked by the U.S Central Bank the tortellin outstanding amount of advances under the bankster and funding program reached 11.9 billion dollars on by Wednesday our top story the collapse of Silicon Valley Bank last week raised questions about what else might be lurking in the wider system within days the market turmoil ensnared Switz lender credit Suites forcing it to borrow up to 54 billion dollars from Switzerland's central bank now large U.S banks have injected 30 billion dollars in deposits into First Republic Bank U.S banks have rushed to the rescue of the First Republic Bank the lender is caught up in a widening crisis triggered by the collapse of two other mid-sized U.S lenders over the past week analysts say that investors are fretting about potential runs on global bank deposits with contagion talks sweeping across trading floors yesterday while Swiss joined Credit Suisse announced borrowing to shore up liquidity the spotlight shifted back to the United States the shares of First Republic a regional lender had tumbled 70 percent in the last nine trading sessions some of the biggest U.S banking names including JPMorgan Chase Citigroup Bank of America Wells Fargo Goldman Sachs and Morgan Stanley are involved in the rescue U.S Regulators said that the show of support was most welcome and shows the resilience of the banking system this week's actions demonstrate our Resolute commitment to ensure that our financial system remains strong and that depositors savings remain safe First Republic Bank is not the first Canary in the mind but there are canaries that are now feed up and those include things like Silicon Valley Bank Signature Bank and lots of worry about Credit Suisse storage financial institution in a market all prophecies are self-fulfilling so if people begin to feel like a bank is going to fail they pull their money and they tell everyone this bank is going to fail and almost no matter how stable the bank was when the Story begins this begins to sap the confidence deny the assets and create a situation where also none of the other players in the market want to stand next to you or want to do business with you a round of financing on Sunday raised through JP Morgan had given First Republic access to 70 billion dollars in funds but that failed to come the investors worries of a contagion deepened with the demise of Signature Bank to follow that of Silicon Valley Bank and depositors began moving cash to larger lenders First Republic Banks stock closed up 10 on news of the rescue but it shares fell 18 in aftermarket trading after the bank said that it would suspend its dividend news of the rescue also helped boost Wall Street for indices smaller Banks also rebounded from the recent sell-off the Federal Reserve has lent U.S banks nearly 12 billion dollars under a new one-year lending program that was unveiled on Sunday night U.S treasury secretary said that authorities moved swiftly to protect depositors at Silicon Valley Bank and Signature Bank she said that authorities acted when they saw a serious risk of contagion that could have triggered runs on many banks well we felt that there was a serious risk of contagion that could have brought down and triggered runs on many banks and that something given that our judgment is that the banking system overall is safe and sound depositors should have confidence in the system and we took these actions as per the United States Central Bank the total outstanding amount of advances under the bank term funding program reached 11.9 billion dollars on Wednesday for more on this we are now being joined by Syed Javed Hassan who is an economic columnist and former chairman of the economic Advisory Group Mr Hassan is joining us from Islamabad sir thank you very much for speaking with weon thank you very much for having me sir Banks coming to the rescue of banks first Swiss Central Bank rescues credit space now Consortium of 11 banks have come to the rescue of First Republic is the crisis averted or does it run deep well we should start with the Silicon Valley Bank for that the Federal Reserve had to invoke the risk and systemic risk risk as an exception for depositors now let me explain this a bit the U.S banks have a insurance policy of about through physic where there's about 250 000 of uh deposits are insured by the physics system now it was felt that this would not be enough to avert the crisis on further back so the for the first time in a long period this Federal Federal Reserve has invoked the systemic risk exception so there's obviously a fair there's a systemic risk and we are beginning to see that as you've mentioned Signature Bank uh Federal uh the Federal Bank all of these things now on top of that we have had the Credit Suisse debacle now we have seen something like 120 billion dollars of deposits being withdrawn from Credit Suisse the Central Bank of Switzerland has come and allowed a credit line of 50 billion now it remains to be seen if we have averted the crisis uh the noise is the right one being made the fact that 30 billion dollars have come through the major banks in the the U.S to support the Federal Bank all of that is is good news but it really remains to be seen whether we have averted the crisis because there's jitteriness among the depositors the smaller banks are seeing some deposits being withdrawn you see one day shares going up then the next day you are against these shares sliding down so I think it's a bit early to say whether the crisis has been averted uh the fact of the matter is the depositors are nervous about the smaller Banks all over and because some of the lending policies have been very liberal and and there is concern that whether these smaller banks will be able to sustain the the the crisis there is and as you mentioned and there's the self-fulfilling promise issue that uh the the fact that people fear that there's going to be a a a collapse they withdraw money and that leads to the collapse anyway so I I think it's good measures that have been taken by the Federal Reserve Bank in the U.S the Swiss Central Bank uh but it remains to be seen whether or the crisis within Credit Suisse or the other smaller banks in the U.S has been completely averted so uh build these bailouts that are now happening incentivize risky behavior and you know Foster uh what is called too big a bank to fail mentality I think I think we are already beginning we're already seeing some effect of that the fact that in 2008 the two big uh too too big to fail predominant happened and there was a major pumping in of liquidity by The Reserve Bank in the U.S as well as other Banks across the world has probably fostered this uh attitudes towards uh being a bit careless about lending policies even though they were strengthening and there was quite a lot of measures taken to avoid it but the very factor of the matter that we are seeing what we are seeing with SVP and other Banks suggests that uh that that there has been a sort of fostering of uh careless policies by the Banks themselves and now as I said I do not want to be one of those who actually promote the idea of self-fulfilling promise I would like to think that the measures taken by the central bank as both in Switzerland and the Us and other Banks across the world will now contain the crisis uh but the Contagion is there there is fear among the positives and we are seeing withdrawals I mean Swiss credit Swiss we saw a withdrawal of something like 120 billion dollars of uh deposits being taken out you're saying similarly in the U.S signature bank so that is the problem the depositors need to be somehow calmed we are not sure we have really crossed that bridge yet so uh uh let's explore that point a little bit further what does this mean what we are witnessing now to the businesses with the deposits in these Banks what should they do that's that's a really tricky question I I would want to advise every businessman not not to start not participate in the crisis and not withdraw uh their their funds especially given the support that we are seeing from the Federal Reserves as well as the larger Banks but having said that uh it is for the individual businesses to decide uh you do not want to precipitate a crisis but uh obviously the the businesses and and individuals have to take their own uh their own decisions and and given that there is some degree of uh concern about the lending policies and the riskiness of uh assets there is on on the books of any of these Banks uh obviously every every depositor every business has to take its own decision and and and and they should be talking to experts as to the health of the balance sheets of individual Banks yes one final question to you yes sir so uh sorry one final question and we are seeing the consequences of that yes uh so will Banks once again get away without being punished for what some call too riskier Behavior you know the thing is the problem is that if banks get punished the whole world gets punished we all get punished economy is going to a slump there could be a major recession we have just come out of covet so while there is a inclination that you want to see a better Behavior by the Banks we certainly want to avoid punishment because that would punish all of us all right Mr Hassan thanks very much for speaking with Beyond joining us from Islamabad and welcome our top focus of this are the collapse of Silicon Valley Bank last week raised questions about what else might be lurking in the wider system within days the market turmoil and snare Swiss lender credly Swiss forcing it to borrow up to 54 billion dollars from Switzerland central bank now large U.S banks have injected 30 billion dollars in deposits into First Republic Bank U.S banks have rushed to the rescue of First Republic Bank the lender is caught up in a widening crisis triggered by the collapse of two other mid-sized U.S lenders over the past week only say investors are fretting about potential rounds on global bank deposits with contagion torque sweeping across trading floors yesterday while three's giant Credit Suisse announced boring to show up liquidity the spotlight shifted back to the United States the shares of First Republic a regional lender had tumbled 70 in the first nine trading sessions some of the biggest U.S banking names including JP Morgan Chase City Group Bank of America Wells Fargo Goldman Sachs and Morgan Stanley are involved in the rescue U.S regulator Sage the show of support is most welcome ensures the resilience of the banking system foreign this week's actions demonstrate our Resolute commitment to ensure that our financial system remains strong and that depositors savings remain safe First Republic Bank is not the first Canary in the mind but there are canaries that are now feet up and those include things like Silicon Valley Bank Signature Bank and lots of worry about Credit Suisse the storage financial institution in a market all prophecies are self-fulfilling so if people begin to feel like a bank is going to fail they pull their money and they tell everyone this bank is going to fail and almost no matter how stable the bank was when the Story begins this begins to sap the confidence deny the assets and create a situation where also none of the other players in the market want to stand next to you or want to do business with you around on financing on Sunday rates through JP Morgan and had given fast Republic access to 70 billion dollars in funds but that failed to come investors worries of a contagion deepen to the demise of Signature Bank to follow that of Silicon Valley and deposits has begun moving costs to larger lenders First Republic Banks stock closed up 10 percent on news of the rescue but its shares fell 18 after after market trading after the bank said it would suspend its dividend the use of the rescue also helped boost wall Street's indices smaller Banks also rebounded from the recent sell-off the Federal Reserve has lent U.S banks nearly 12 billion dollars and a new one-year lending program unveiled on Sunday U.S treasury secretary said authorities moved swiftly to protect depositors at Silicon Valley Bank and Signature Bank she said authorities acted when they saw a serious risk of contagion that could have triggered runs on many banks will we felt that there was a serious risk of contagion that could have brought down and triggered runs on many banks and that something given that our judgment is that the banking system overall is safe and sound depositors should have confidence in the system and we took these actions asked by the U.S Central Bank the totally outstanding amount of advances under the bankster and funding program reached 11.9 billion dollars on by Wednesday our top story the collapse of Silicon Valley Bank last week raised questions about what else might be lurking in the wider system within days the market turmoil ensnared Switz lender credit Suites forcing it to borrow up to 54 billion dollars from Switzerland's central bank now large U.S banks have injected 30 billion dollars in deposits into First Republic Bank U.S banks have rushed to the rescue of the First Republic Bank the lender is caught up in a widening crisis triggered by the collapse of two other mid-sized U.S lenders over the past week analysts say that investors are fretting about potential runs on global bank deposits with contagion talks sweeping across trading floors yesterday while Swiss joined Credit Suisse announced borrowing to shore up liquidity the spotlight shifted back to the United States the shares of First Republic a regional lender had tumbled 70 percent in the last nine trading sessions some of the biggest U.S banking names including JPMorgan Chase Citigroup Bank of America Wells Fargo Goldman Sachs and Morgan Stanley are involved in the rescue U.S Regulators said that the show of support was most welcome and shows the resilience of the banking system this week's actions demonstrate our Resolute commitment to ensure that our financial system remains strong and the depositors savings remain safe First Republic Bank is not the first Canary in the mind but there are canaries that are now feed up and those include things like Silicon Valley Bank Signature Bank and lots of worry about Credit Suisse the storage financial institution in a market all prophecies are self-fulfilling so if people begin to feel like a bank is going to fail they pull their money and they tell everyone this bank is going to fail and almost no matter how stable the bank was when the Story begins this begins to sap the confidence deny the assets and create a situation where also none of the other players in the market want to stand next to you or want to do business with you a round of financing on Sunday raised through JP Morgan had given First Republic access to 70 billion dollars in funds but that fails to come the investors worries of a contagion deepened with the demise of Signature Bank to follow that of Silicon Valley Bank and depositors began moving cash to larger lenders First Republic Banks stock closed up 10 on news of the rescue but its shares fell 18 in aftermarket trading after the bank said that it would suspend its dividend news of the rescue also helped to boost Wall Street for indices smaller Banks also rebounded from the recent sell-off the Federal Reserve has lent U.S banks nearly 12 billion dollars under a new one-year lending program that was unveiled on Sunday night U.S treasury secretary said that authorities moved swiftly to protect depositors at Silicon Valley Bank and Signature Bank she said that authorities acted when they saw a serious risk of contagion that could have triggered runs on many banks well we felt that there was a serious risk of contagion that could have brought down and triggered runs on many banks and that something given that our judgment is that the banking system overall is safe and sound depositors should have confidence in the system and we took these actions as per the United States Central Bank the total outstanding amount of advances under the bank term funding program reached 11.9 billion dollars on Wednesday for more on this we are now being joined by Syed Javed Hassan who is an economic columnist and former chairman of the economic Advisory Group Mr Hassan is joining us from Islamabad sir thank you very much for speaking with weon thank you very much for having me so Banks coming to the rescue of banks first Swiss Central Bank rescues Credit Suisse now Consortium of 11 banks have come to the rescue of First Republic is the crisis averted or does it run deep well we should start with the Silicon Valley Bank for that the Federal Reserve had to invoke the risk and systemic risk risk as an exception for depositors now let me explain this a bit the U.S banks have a insurance policy of about through physic where there's about 250 000 of uh deposits are insured by the physics system now it was felt that this would not be enough to avert the crisis on further back so the for the first time in a long period this Federal Federal Reserve has invoked the systemic risk exception so there's obviously a fair there's a systemic risk and we are beginning to see that as you've mentioned Signature Bank uh Federal the Federal Bank all of these things now on top of that we have had the Credit Suisse debacle now we have seen something like 120 billion dollars of deposits being withdrawn from Credit Suisse the Central Bank of Switzerland has come and allowed a credit line of 50 billion now it remains to be seen if we have averted the crisis uh the noise is the right one being made the fact that 30 billion dollars have come through the major banks in the the US to support the Federal Bank all of that is is good news but it really remains to be seen whether we have averted the crisis because there's jitteriness among the depositors the smaller banks are seeing some deposits being withdrawn you see one day shares going up then the next day you are against these shares sliding down so I think it's a bit early to say whether the crisis has been averted uh the fact of the matter is the depositors are nervous about the smaller Banks all over and because some of the lending policies have been very liberal and and there is concern that whether these smaller banks will be able to sustain the the the crisis there is and as you mentioned and there's the self-fulfilling promise issue that uh the the fact that people fear that there's going to be a a collapse they withdraw money and that leads to the collapse anyway so I I think it's good measures that have been taken by the Federal Reserve Bank in the U.S the Swiss Central Bank uh but it remains to be seen whether or the crisis whether in Credit Suisse or the other smaller banks in the U.S has been completely averted so uh will these bailouts that are now happening incentivize risky behavior and you know Foster uh what is called too big a bank to fail mentality I think I think we are already beginning we're already seeing some effect of that the fact that in 2008 the two big uh too too big to fail predominant happened and there was a major pumping in of liquidity by The Reserve Bank in the U.S as well as other Banks across the world has probably fostered this uh attitudes towards uh being a bit careless about lending policies even though they were strengthening and there was quite a lot of measures taken to avoid it but the very factor of the matter that we are seeing what we are seeing with SVP and other Banks suggests that uh that that there has been a sort of fostering of uh careless policies by the Banks themselves and now as I said I do not want to be one of those who actually promote the idea of self-fulfilling promise I would like to think that the measures taken by the central bank as both in Switzerland and the Us and other Banks across the world will now contain the crisis uh but the contagion is there there is fear among the positives and we are seeing withdrawals I mean Swiss credit Swiss we saw a withdrawal of something like 120 billion dollars of uh deposits being taken out you're saying some in the U.S signature bank so that is the problem the depositors need to be somehow calmed we are not sure we have really crossed that bridge yet so uh uh let's explore that point a little bit further what does this mean what we are witnessing now to the businesses with the deposits in these Banks what should they do that's that's a really tricky question I I would want to advise every businessman not not to start not participate in the crisis and not withdraw uh their their funds especially given the support that we are seeing from the Federal Reserves as well as the larger Banks but having said that uh it is for the individual businesses to decide uh you do not want to precipitate a crisis but uh obviously the the businesses and and individuals have to take their own uh their own decisions and and given that there is some degree of uh concern about the lending policies and the riskiness of uh assets there is on on the books of any of these Banks uh obviously every every depositor every business has to take its own decision and and and and they should be talking to experts as to the health of the balance sheets of individual Banks yes one final question to you yes sir so uh sorry one final question and and we are seeing the consequences of that yes uh so will Banks once again get away without being punished for what some call a too riskier Behavior you know the thing is the problem is that if banks get punished the whole world gets punished we all get punished economy is going to a slump there could be a major recession we have just come out of covet so while there is a inclination that you want to see a better Behavior by the Banks we certainly want to avoid punishment because that would punish all of us all right Mr Hassan thanks very much for speaking with Beyond joining us from Islamabad and welcome our top focus of this are the collapse of Silicon Valley Bank last week raised questions about what else might be lurking in the wider system within days the market turmoil and snared through his lender Credit Suisse forcing it to borrow up to 54 billion dollars from Switzerland central bank now large U.S banks have injected 30 billion dollars in deposits into First Republic Bank U.S banks have rushed to the rescue of First Republic Bank the lender is caught up in a widening crisis triggered by the collapse of two other mid-sized U.S lenders over the past week only say investors are fretting about potential runs on global bank deposits with contagion torque sweeping across trading floors yesterday while three's giant Credit Suisse announced boring to show up liquidity the spotlight shifted back to the United States the shares of First Republic a regional lender had tumbled 70 in the first nine trading sessions some of the biggest U.S banking names including JP Morgan Chase City Group Bank of America Wells Fargo Goldman Sachs and Morgan Stanley are involved in the rescue U.S regulator said the show of support is most welcome ensures the resilience of the banking system foreign this week's actions demonstrate our Resolute commitment to ensure that our financial system remains strong and the depositors savings remain safe First Republic Bank is not the first Canary in the mind but there are canaries that are now feed up and those include things like Silicon Valley Bank Signature Bank and lots of worry about Credit Suisse the storage financial institution in a market all prophecies are self-fulfilling so if people begin to feel like a bank is going to fail they pull their money and they tell everyone this bank is going to fail and almost no matter how stable the bank was when the Story begins this begins to sap the confidence deny the assets and create a situation where also none of the other players in the market want to stand next to you or want to do business with you around on financing on Sunday race through JP Morgan and had given fast Republic access to 70 billion dollars in funds but that failed to come investors Warriors of a contagion deepen to the demise of Signature Bank to follow that of Silicon Valley and deposits has begun moving costs to larger lenders First Republic Banks stock closed up 10 percent on news of the rescue but its shares fell 18 after after market trading after the bank said it would suspend its dividend the use of the rescue also helped boost wall Street's indices smaller Banks also rebounded from the recent sell-off the Federal Reserve has lent U.S banks nearly 12 billion dollars and a new one-year lending program unveiled on Sunday U.S treasury secretary said authorities moved swiftly to protect depositors at Silicon Valley Bank and Signature Bank she said authorities acted when they saw a serious risk of contingent that could have triggered runs on many bunks will we felt that there was a serious risk of contagion that could have brought down and triggered runs on many banks and that something given that our judgment is that the banking system overall is safe and sound depositors should have confidence in the system and we took these actions asked by the U.S Central Bank the tortellin outstanding amount of advances under the bankster and funding program reached 11.9 billion dollars on by Wednesday our top story the collapse of Silicon Valley Bank last week raised questions about what else might be lurking in the wider system within days the market turmoil ensnared Swiss Linda credit Suites forcing it to borrow up to 54 billion dollars from Switzerland's central bank now large U.S banks have injected 30 billion dollars in deposits into First Republic Bank U.S banks have rushed to the rescue of the First Republic Bank the lender is caught up in a widening crisis triggered by the collapse of two other mid-sized U.S lenders over the past week analysts say that investors are fretting about potential runs on global bank deposits with contagion talks sweeping across trading floors yesterday while Swiss joined Credit Suisse announced borrowing to shore up liquidity the spotlight shifted back to the United States the shares of First Republic a regional lender had tumbled 70 percent in the last nine trading sessions some of the biggest U.S banking names including JPMorgan Chase Citigroup Bank of America Wells Fargo Goldman Sachs and Morgan Stanley are involved in the rescue U.S Regulators said that the show of support was most welcome and shows the resilience of the banking system this week's actions demonstrate our Resolute commitment to ensure that our financial system remains strong and the depositors savings remain safe First Republic Bank is not the first Canary in the mind but there are canaries that are now feet up and those include things like Silicon Valley Bank Signature Bank and lots of worry about Credit Suisse the storage financial institution in a market all prophecies are self-fulfilling so if people begin to feel like a bank is going to fail they pull their money and they tell everyone this bank is going to fail and almost no matter how stable the bank was when the Story begins this begins to sap the confidence deny the assets and create a situation where also none of the other players in the market want to stand next to you or want to do business with you a round of financing on Sunday raised through JP Morgan had given First Republic access to 70 billion dollars in funds but that fails to come the investors worries of a contagion deepened with the demise of Signature Bank to follow that of Silicon Valley Bank and depositors began moving cash to larger lenders First Republic Banks stock closed up 10 on news of the rescue but its shares fell 18 in aftermarket trading after the bank said that it would suspend its dividend news of the rescue also helped to boost Wall Street to indices smaller Banks also rebounded from the recent sell-off the Federal Reserve has lent U.S banks nearly 12 billion dollars under a new one-year lending program that was unveiled on Sunday night U.S treasury secretary said that authorities moved swiftly to protect depositors at Silicon Valley Bank and Signature Bank she said that authorities acted when they saw a serious risk of contagion that could have triggered runs on many banks well we felt that there was a serious risk of contagion that could have brought down and triggered runs on many banks and that something given that our judgment is that the banking system overall is safe and sound depositories should have confidence in the system and we took these actions as per the United States Central Bank the total outstanding amount of advances under the bank term funding program reached 11.9 billion dollars on Wednesday for more on this we are now being joined by Syed Javed Hassan who is an economic columnist and former chairman of the economic Advisory Group Mr Hassan is joining us from Islamabad sir thank you very much for speaking with weon thank you very much for having me so Banks coming to the rescue of banks first Swiss Central Bank rescues credit space now Consortium of 11 banks have come to the rescue of First Republic is the crisis averted or does it run deep well we should start with the Silicon Valley Bank for that the Federal Reserve had to invoke the risk and systemic risk risk as an exception for depositors now let me explain this a bit the U.S banks have a insurance policy of about through physic where there's about 250 000 of uh deposits are insured by the physics system now it was felt that this would not be enough to avert the crisis on further back so the for the first time in a long period this Federal Federal Reserve has invoked the systemic risk exception so there's obviously a fair there's a systemic risk and we are beginning to see that as you've mentioned Signature Bank uh Federal uh the Federal Bank all of these things now on top of that we have had the Credit Suisse debacle now we have seen something like 120 billion dollars of deposits being withdrawn from Credit Suisse the Central Bank of Switzerland has come and allowed a credit line of 50 billion now it remains to be seen if we have averted the crisis uh the noise is the right one being made the fact that 30 billion dollars have come through the major banks in the the US to support the Federal Bank all of that is is good news but it really remains to be seen whether we have averted the crisis because there's jitteriness among the depositors the smaller banks are seeing some deposits being withdrawn you see one day shares going up then the next day you're against these shares sliding down so I think it's a bit early to say whether the crisis has been averted uh the fact of the matter is the depositors are nervous about the smaller Banks all over and because some of the lending policies have been very liberal and and there is concern that whether these smaller banks will be able to sustain the the the crisis there is and as you mentioned and there's the self-fulfilling promise issue that uh the the fact that people fear that there's going to be a a a collapse they withdraw money and that leads to the collapse anyway so I I think it's good measures that have been taken by the Federal Reserve Bank in the U.S the Swiss Central Bank but it remains to be seen whether or the crisis whether in Credit Suisse or the other smaller banks in the U.S has been completely averted so uh will these bailouts that are now happening incentivize risky behavior and you know Foster uh what is called too big a bank to fail mentality I think I think we are already beginning we're already seeing some effect of that the fact that in 2008 the two big uh too do big to fail predominant happened and there was a major pumping in of liquidity by The Reserve Bank in the U.S as well as other Banks across the world has probably fostered this uh attitudes towards uh being a bit careless about lending policies even though they were strengthening and there was quite a lot of measures taken to avoid it but the very factor of the matter that we are seeing what we are seeing with SVP and other Banks suggests that uh that that there has been a sort of fostering of uh careless policies by the Banks themselves and now as I said I do not want to be one of those who actually promote the idea of self-fulfilling promise I would like to think that the measures taken by the central bank as both in Switzerland and the Us and other Banks across the world will now contain the crisis uh but the contagion is there there is fear among the positives and we are seeing withdrawals I mean Swiss credit Swiss we saw a withdrawal of something like 120 billion dollars of uh deposits being taken out you're saying similarly in the U.S signature bank so that is the problem the depositors need to be somehow calmed we are not sure we have really crossed that bridge yet so uh uh let's explore that point a little bit further what does this mean what we are witnessing now to the businesses with the deposits in these Banks what should they do that's that's a really tricky question I I would want to advise every businessman not not to start not participate in the crisis and not withdraw uh their their funds especially given the support that we are seeing from the Federal Reserves as well as the larger Banks but having said that uh it is for the individual businesses to decide uh you do not want to precipitate a crisis but uh obviously the the businesses and and individuals have to take their own uh their own decisions and and given that there is some degree of uh concern about the lending policies and the riskiness of uh assets there is on on the books of any of these Banks uh obviously every every depositor every business has to take its own decision and and and and they should be talking to experts as to the health of the balance sheets of individual Banks yes one final question to you yes sir uh sorry this was very careless and and and and we are seeing the consequences of that yes uh so will Banks once again get away without being punished for what some call a too riskier Behavior you know the thing is the problem is that if banks get punished the whole world gets punished we all get punished the economy is going to a slump there could be a major recession we have just come out of covet so while there is a inclination that you want to see a better Behavior by the Banks we certainly want to avoid punishment because that would punish all of us all right Mr Hassan thanks very much for speaking with Beyond joining us from Islamabad and welcome our top focus of this are the collapse of Silicon Valley Bank last week raised questions about what else might be lurking in the wider system within days the market turmoil and snare Swiss lender Credit Suisse forcing it to borrow up to 54 billion dollars from Switzerland central bank now large U.S banks have injected 30 billion dollars in deposits into First Republic Bank U.S banks have rushed to the rescue of First Republic Bank the lender is caught up in a widening crisis triggered by the collapse of two other mid-sized U.S lenders over the past week only say investors are fretting about potential runs on global bank deposits with contagion torque sweeping across trading floors yesterday while three's giant Credit Suisse announced boring to show up liquidity the spotlight shifted back to the United States the shares of First Republic a regional lender had tumbled 70 in the first nine trading sessions some of the biggest U.S banking names including JP Morgan Chase City Group Bank of America Wells Fargo Goldman Sachs and Morgan Stanley are involved in the rescue U.S Regulators said the show of supporters most welcome and shows the resilience of the banking system foreign this week's actions demonstrate our Resolute commitment to ensure that our financial system remains strong and the depositors savings remain safe First Republic Bank is not the first Canary in the mind but there are canaries that are now feet up and those include things like Silicon Valley Bank Signature Bank and lots of worry about Credit Suisse the storage financial institution in a market all prophecies are self-fulfilling so if people begin to feel like a bank is going to fail they pull their money and they tell everyone this bank is going to fail and almost no matter how stable the bank was when the Story begins this begins to sap the confidence deny the assets and create a situation where also none of the other players in the market want to stand next to you or want to do business with you around on financing on Sunday rates through JP Morgan and had given fast Republic access to 70 billion dollars in funds but that failed to come investors worries of a contagion deepen through the demise of Signature Bank to follow that of Silicon Valley and deposits has begun moving costs to larger lenders First Republic Banks stock closed up 10 percent on news of the rescue but its shares fell 18 after a after market trading after the bank said it would suspend its dividend the use of the rescue also helped boost wall Street's indices smaller Banks also rebounded from the recent sell-off the Federal Reserve has lent U.S banks nearly 12 billion dollars and a new one-year lending program unveiled on Sunday U.S treasury secretary said authorities moved swiftly to protect depositors at Silicon Valley Bank and Signature Bank she said authorities acted when they saw a serious risk of contingent that could have triggered rounds on many bunks will we felt that there was a serious risk of contagion that could have brought down and triggered runs on many banks and that something given that our judgment is that the banking system overall is safe and sound depository should have confidence in the system and we took these actions asked by the U.S Central Bank the totally outstanding amount of advances under the bankster and funding program reached 11.9 billion dollars on by Wednesday our top story the collapse of Silicon Valley Bank last week raised questions about what else might be lurking in the wider system within days the market turmoil ensnared Swiss Lander credit Suites forcing it to borrow up to 54 billion dollars from Switzerland's central bank now large U.S banks have injected 30 billion dollars in deposits into First Republic Bank U.S banks have rushed to the rescue of the First Republic Bank the lender is caught up in a widening crisis triggered by the collapse of two other mid-sized U.S lenders over the past week analysts say that investors are fretting about potential runs on global bank deposits with contagion talks sweeping across trading floors yesterday while Swiss joined Credit Suisse announced borrowing to shore up liquidity the spotlight shifted back to the United States the shares of First Republic a regional lender had tumbled 70 percent in the last nine trading sessions some of the biggest U.S banking names including JPMorgan Chase Citigroup Bank of America Wells Fargo Goldman Sachs and Morgan Stanley are involved in the rescue U.S Regulators said that the show of support was most welcome and shows the resilience of the banking system this week's actions demonstrate our Resolute commitment to ensure that our financial system remains strong and that depositors savings remain safe First Republic Bank is not the first Canary in the mind but there are canaries that are now feed up and those include things like Silicon Valley Bank Signature Bank and lots of worry about Credit Suisse the storage financial institution in a market all prophecies are self-fulfilling so if people begin to feel like a bank is going to fail they pull their money and they tell everyone this bank is going to fail and almost no matter how stable the bank was when the Story begins this begins to sap the confidence deny the assets and create a situation where also none of the other players in the market want to stand next to you or want to do business with you a round of financing on Sunday raised through JP Morgan had given First Republic access to 70 billion dollars in funds but that fails to come the investors worries of a contagion deepened with the demise of Signature Bank to follow that of Silicon Valley Bank and depositors began moving cash to larger lenders First Republic Banks stock closed up 10 on news of the rescue but it shares fell 18 in aftermarket trading after the bank said that it would suspend its dividend news of the rescue also helped boost Wall Street for indices smaller Banks also rebounded from the recent sell-off the Federal Reserve has lent U.S banks nearly 12 billion dollars under a new one-year lending program that was unveiled on Sunday night U.S treasury secretary said that authorities moved swiftly to protect depositors at Silicon Valley Bank and Signature Bank she said that authorities acted when they saw a serious risk of contagion that could have triggered runs on many banks well we felt that there was a serious risk of contagion that could have brought down and triggered runs on many banks and that something given that our judgment is that the banking system overall is safe and sound depository should have confidence in the system and we took these actions as per the United States Central Bank the total outstanding amount of advances under the bank term funding program reached 11.9 billion dollars on Wednesday for more on this we are now being joined by Syed Javed Hassan who is an economic columnist and former chairman of the economic Advisory Group Mr Hassan is joining us from Islamabad sir thank you very much for speaking with weon thank you very much for having me so Banks coming to the rescue of banks first Swiss Central Bank rescues Credit Suisse now Consortium of 11 banks have come to the rescue of First Republic is the crisis averted or does it run deep well we should start with the Silicon Valley Bank for that the Federal Reserve had to invoke the risk and systemic risk risk as an exception for depositors now let me explain this a bit the U.S banks have a insurance policy of about through physic where there's about 250 000 of uh deposits are insured by the physics system now it was felt that this would not be enough to avert the crisis on further back so the for the first time in a long period this Federal Federal Reserve has invoked the systemic risk exception so there's obviously a fair there's a systemic risk and we are beginning to see that as you've mentioned Signature Bank uh Federal uh the Federal Bank all of these things now on top of that we have had the Credit Suisse debacle now we have seen something like 120 billion dollars of deposits being withdrawn from Credit Suisse the Central Bank of Switzerland has come and allowed a credit line of 50 billion now it remains to be seen if we have averted the crisis uh the noise is the right one being made the fact that 30 billion dollars have come through the major banks in the the U.S to support the Federal Bank all of that is is good news but it really remains to be seen whether we have averted the crisis because there's jitteriness among the depositors the smaller banks are seeing some deposits being withdrawn you see one day shares going up then the next day you are against these shares sliding down so I think it's a bit early to say whether the crisis has been averted uh the fact of the matter is the depositors are nervous about the smaller Banks all over and because some of the lending policies have been very liberal and and there is concern that whether these smaller banks will be able to sustain the the the the crisis there is and as you mentioned there's the self-fulfilling promise issue that uh the the fact that people fear that there's going to be a a a collapse they withdraw money and that leads to the collapse anyway so uh I think it's good measures that have been taken by the Federal Reserve Bank in the U.S the Swiss Central Bank but it remains to be seen whether or the crisis whether in credit suis or the other smaller banks in the U.S has been completely averted so uh will these bailouts that are now happening incentivize risky behavior and you know Foster uh what is called too big a bank to fail mentality I think I think we are already beginning we're already seeing some effect of that the fact that in 2008 the two big uh too too big to fail predominant happen and there was a major pumping in of liquidity by The Reserve Bank in the U.S as well as other Banks across the world has probably fostered this uh attitudes towards uh being a bit careless about lending policies even though they were strengthening and there was quite a lot of measures taken to avoid it but the very factor of the matter that we are seeing what we are seeing with SVP and other Banks suggests that uh that that there has been a sort of fostering of uh careless policies by the Banks themselves and now as I said I do not want to be one of those who actually promote the idea of self-fulfilling promise I would like to think that the measures taken by the central bank as both in Switzerland and the Us and other Banks across the world will now contain the crisis uh but the contagion is there there is fear among the positives and we are seeing withdrawals I mean Swiss credit Swiss we saw a withdrawal of something like 120 billion dollars of uh deposits being taken out you're saying similarly in the U.S signature bank so that is the problem the depositors need to be somehow calmed we are not sure we have really crossed that bridge yet so uh uh let's explore that point a little bit further what does this mean what we are witnessing now to the businesses with the deposits in these Banks what should they do that's that's a really tricky question I I would want to advise every businessman not not to start not participate in the crisis and not withdraw uh their their funds especially given the support that we are seeing from the Federal Reserves as well as the larger Banks but having said that uh it is for the individual businesses to decide uh you do not want to precipitate a crisis but uh obviously the the businesses and and individuals have to take their own uh their own decisions and and given that there is some degree of uh concern about the lending policies and the riskiness of uh assets there is on on the books of any of these Banks uh obviously every every depositor every business has to take its own decision and and and and they should be talking to experts as to the health of the balance sheets of individual Banks yes one final question to you yes sir so uh sorry one final question this was very careless and and and and we are seeing the consequences of that yes uh so will Banks once again get away without being punished for what some call too risky a behavior you know the thing is the problem is that if banks get punished the whole world gets punished we all get punished economy is going to a slump there could be a major recession we have just come out of covet so while there is a inclination that you want to see a better Behavior by the Banks we certainly want to avoid punishment because that would punish all of us all right Mr Hassan thanks very much for speaking with Beyond joining us from Islamabad and welcome our top focus of this are the collapse of Silicon Valley Bank last week raised questions about what else might be lurking in the wider system within days the market turmoil and snare Swiss lender Credit Suisse forcing it to borrow up to 54 billion dollars from Switzerland central bank now large U.S banks have injected 30 billion dollars in deposits into First Republic Bank U.S banks have rushed to the rescue of First Republic Bank the lender is caught up in a widening crisis triggered by the collapse of two other mid-sized U.S lenders over the past week only say investors are fretting about potential rounds on global bank deposits with contagion torque sweeping across trading floors yesterday while three's giant Credit Suisse announced boring to show up liquidity the spotlight shifted back to the United States the shares of First Republic a regional lender had tumbled 70 in the first nine trading sessions some of the biggest U.S banking names including JP Morgan Chase City Group Bank of America Wells Fargo Goldman Sachs and Morgan Stanley are involved in the rescue U.S regulator Sage the show of supporters most welcome ensures the resilience of the banking system foreign this week's actions demonstrate our Resolute commitment to ensure that our financial system remains strong and the depositor's savings remain safe First Republic Bank is not the first Canary in the mind but there are canaries that are now feed up and those include things like Silicon Valley Bank Signature Bank and lots of worry about Credit Suisse the storage financial institution in a market all prophecies are self-fulfilling so if people begin to feel like a bank is going to fail they pull their money and they tell everyone this bank is going to fail and almost no matter how stable the bank was when the Story begins this begins to sap the confidence deny the assets and create a situation where also none of the other players in the market want to stand next to you or want to do business with you around on financing on Sunday raised through JP Morgan and had given fast Republic access to 70 billion dollars in funds but that failed to come investors worries of a contagion deepen through the demise of Signature Bank to follow that of Silicon Valley and deposits has begun moving costs to larger lenders First Republic Banks stock closed up 10 percent on news of the rescue but its shares fell 18 after after market trading after the bank said it would suspend its dividend the use of the rescue also helped boost wall Street's indices smaller Banks also rebounded from the recent sell-off the Federal Reserve has lent U.S banks nearly 12 billion dollars and a new one-year lending program unveiled on Sunday U.S treasury secretary said authorities moved swiftly to protect depositors at Silicon Valley Bank and Signature Bank she said authorities acted when they saw a serious risk of contagion that could have triggered runs on many banks will we felt that there was a serious risk of contagion that could have brought down and triggered runs on many banks and that something given that our judgment is that the banking system overall is safe and sound depositors should have confidence in the system and we took these actions asked by the U.S Central Bank the totally outstanding amount of advances under the bankster and funding program reached 11.9 billion dollars on by Wednesday our top story the collapse of Silicon Valley Bank last week raised questions about what else might be lurking in the wider system within days the market turmoil ensnared Switz lender credit Suites forcing it to borrow up to 54 billion dollars from Switzerland's central bank now large U.S banks have injected 30 billion dollars in deposits into First Republic Bank U.S banks have rushed to the rescue of the First Republic Bank the lender is caught up in a widening crisis triggered by the collapse of two other mid-sized U.S lenders over the past week analysts say that investors are fretting about potential runs on global bank deposits with contagion talks sweeping across trading floors yesterday while Swiss joined Credit Suisse announced borrowing to shore up liquidity the spotlight shifted back to the United States the shares of First Republic a regional lender had tumbled 70 percent in the last nine trading sessions some of the biggest U.S banking names including JPMorgan Chase Citigroup Bank of America Wells Fargo Goldman Sachs and Morgan Stanley are involved in the rescue U.S Regulators said that the show of support was most welcome and shows the resilience of the banking system this week's actions demonstrate our Resolute commitment to ensure that our financial system remains strong and the depositors savings remain safe First Republic Bank is not the first Canary in the mind but there are canaries that are now feet up and those include things like Silicon Valley Bank Signature Bank and lots of worry about Credit Suisse the storage financial institution in a market all prophecies are self-fulfilling so if people begin to feel like a bank is going to fail they pull their money and they tell everyone this bank is going to fail and almost no matter how stable the bank was when the Story begins this begins to sap the confidence deny the assets and create a situation where also none of the other players in the market want to stand next to you or want to do business with you a round of financing on Sunday raised through JP Morgan had given First Republic access to 70 billion dollars in funds but that failed to come the investors worries of a contagion deepened with the demise of Signature Bank to follow that of Silicon Valley Bank and depositors began moving cash to larger lenders First Republic Banks stock closed up 10 on news of the rescue but it shares well 18 in aftermarket trading after the bank said that it would suspend its dividend news of the rescue also helped boost Wall Street for indices smaller Banks also rebounded from the recent sell-off the Federal Reserve has lent U.S banks nearly 12 billion dollars under a new one-year lending program that was unveiled on Sunday night U.S treasury secretary said that authorities moved swiftly to protect depositors at Silicon Valley Bank and Signature Bank she said that authorities acted when they saw a serious risk of contagion that could have triggered runs on many bats well we felt that there was a serious risk of contagion that could have brought down and triggered runs on many banks and that something given that our judgment is that the banking system overall is safe and sound depositors should have confidence in the system and we took these actions as per the United States Central Bank the total outstanding amount of advances under the bank term funding program reached 11.9 billion dollars on Wednesday for more on this we are now being joined by Syed Javed Hassan who is an economic columnist and former chairman of the economic Advisory Group Mr Hassan is joining us from Islamabad sir thank you very much for speaking with weon thank you very much for having me so Banks coming to the rescue of banks first Swiss Central Bank rescues Credit Suisse now Consortium of 11 banks have come to the rescue of First Republic is the crisis averted or does it run deep well we should start with the Silicon Valley Bank for that the Federal Reserve had to invoke the risk and systemic risk it risk as an exception for depositors now let me explain this a bit the U.S banks have a insurance policy of about through physic where there's about 250 000 of uh deposits are insured by the physics system now it was felt that this would not be enough to avert the crisis on further back so the for the first time in a long period this Federal Federal Reserve has invoked the systemic risk exception so there's obviously a fair there's a systemic risk and we are beginning to see that as you've mentioned Signature Bank uh Federal uh the Federal Bank all of these things now on top of that we have had the Credit Suisse debacle now we have seen something like 120 billion dollars of deposits being withdrawn from Credit Suisse the Central Bank of Switzerland has come and allowed a credit line of 50 billion now it remains to be seen if we have averted the crisis uh the noise is the right one being made the fact that 30 billion dollars have come through the major banks in the the U.S to support the Federal Bank all of that is is good news but it really remains to be seen whether we have averted the crisis because there's jitteriness among the depositors the smaller banks are seeing some deposits being withdrawn you see one day shares going up then the next day you are against these years sliding down so I think it's a bit early to say whether the crisis has been averted uh the fact of the matter is the depositors are nervous about the smaller Banks all over and because some of the lending policies have been very liberal and and there is concern that whether these smaller banks will be able to sustain the the the crisis there is and as you mentioned and there's the self-fulfilling promise issue that uh the the fact that people fear that there's going to be a a a collapse they withdraw money and that leads to the collapse anyway so I I think it's good measures that have been taken by the Federal Reserve Bank in the U.S the Swiss Central Bank but it remains to be seen whether or the crisis within Credit Suisse or the other smaller banks in the U.S has been completely averted so uh build these bailouts that are now happening incentivize risky behavior and you know Foster uh what is called too big a bank to fail mentality I think I think we are already beginning we're already seeing some effect of that the fact that in 2008 the two big uh too too big to fail predominant happened and there was a major pumping in of liquidity by The Reserve Bank in the U.S as well as other Banks across the world has probably fostered this attitudes towards uh being a bit careless about lending policies even though they were strengthening and there was quite a lot of measures taken to avoid it but the very factor of the matter that we are seeing what we are seeing with SVP and other Banks suggests that uh that that there has been a sort of fostering of uh careless policies by the Banks themselves and now as I said I do not want to be one of those who actually promote the idea of self-fulfilling promise I would like to think that the measures taken by the central bank as both in Switzerland and the Us and other Banks across the world will now contain the crisis uh but the contagion is there there is fear among the positives and we are seeing withdrawals I mean Swiss credit Swiss we saw a withdrawal of something like 120 billion dollars of uh deposits being taken out you're saying in the U.S signature bank so that is the problem the depositors need to be somehow calmed we are not sure we have really crossed that bridge yet so uh uh let's explore that point a little bit further what does this mean what we are witnessing now to the businesses with the deposits in these Banks what should they do that's that's a really tricky question I I would want to advise every businessman not not to start not participate in the crisis and not withdraw uh their their funds especially given the support that we are seeing from the Federal Reserves as well as the larger Banks but having said that uh it is for the individual businesses to decide uh you do not want to precipitate a crisis but uh obviously the the businesses and and individuals have to take their own uh their own decisions and and given that there is some degree of uh concern about the lending policies and the riskiness of uh assets there is on on the books of any of these Banks uh obviously every every depositor every business has to take its own decision and and and and they should be talking to experts as to the health of the balance sheets of individual Banks yes one final question to you yes sir sir sorry one final question and we are seeing the consequences of that yes uh so will Banks once again get away without being punished for what some call too riskier Behavior you know the thing is the problem is that if banks get punished the whole world gets punished we all get punished the economy is going to a slump there could be a major recession we have just come out of covet so while there is a inclination that you want to see a better Behavior by the Banks we certainly want to avoid punishment because that would punish all of us all right Mr Hassan thanks very much for speaking with Beyond joining us from Islamabad and welcome our top focus of this are the collapse of Silicon Valley Bank last week raised questions about what else might be lurking in the wider system within days the market turmoil and snare Swiss lender Credit Suisse forcing it to borrow up to 54 billion dollars from Switzerland central bank now large U.S banks have injected 30 billion dollars in deposits into First Republic Bank U.S banks have rushed to the rescue of First Republic Bank the lender is caught up in a widening crisis triggered by the collapse of two other mid-sized U.S lenders over the past week only say investors are fretting about potential runs on global bank deposits with contagion torque sweeping across trading floors yesterday while three's giant Credit Suisse announced boring to show up liquidity the spotlight shifted back to the United States the shares of First Republic a regional lender had tumbled 70 in the first nine trading sessions some of the biggest U.S banking names including JP Morgan Chase City Group Bank of America Wells Fargo Goldman Sachs and Morgan Stanley are involved in the rescue U.S Regulators said the show of supporters most welcome ensures the resilience of the banking system foreign this week's actions demonstrate our Resolute commitment to ensure that our financial system remains strong and that depositors savings remain safe First Republic Bank is not the first Canary in the mind but there are canaries that are now feet up and those include things like Silicon Valley Bank Signature Bank and lots of worry about Credit Suisse the storage financial institution in a market all prophecies are self-fulfilling so if people begin to feel like a bank is going to fail they pull their money and they tell everyone this bank is going to fail and almost no matter how stable the bank was when the Story begins this begins to sap the confidence deny the assets and create a situation where also none of the other players in the market want to stand next to you or want to do business with you around on financing on Sunday rates through JP Morgan and had given fast Republic access to 70 billion dollars in funds but that failed to come investors worries of a contagion depend to the demise of Signature Bank to follow that of Silicon Valley and deposits has begun moving costs to larger lenders First Republic Banks stock closed up 10 percent on news of the rescue but its shares fell 18 after after market trading after the bank said it would suspend its dividend the use of the rescue also helped boost wall Street's indices smaller Banks also rebounded from the recent sell-off the Federal Reserve has lent U.S banks nearly 12 billion dollars and a new one-year lending program unveiled on Sunday U.S treasury secretary said authorities moved swiftly to protect depositors at Silicon Valley Bank and Signature Bank she said authorities acted when they saw a serious risk of contingent that could have triggered rounds on many bunks will we felt that there was a serious risk of contagion that could have brought down and triggered runs on many banks and that something given that our judgment is that the banking system overall is safe and sound depositors should have confidence in the system and we took these actions asked by the U.S Central Bank the tortellin outstanding amount of advances under the bankster and funding program reached 11.9 billion dollars on by Wednesday our top story the collapse of Silicon Valley Bank last week raised questions about what else might be lurking in the wider system within days the market turmoil ensnared Switz lender credit Suites forcing it to borrow up to 54 billion dollars from Switzerland's central bank now large U.S banks have injected 30 billion dollars in deposits into First Republic Bank U.S banks have rushed to the rescue of the First Republic Bank the lender is caught up in a widening crisis triggered by the collapse of two other mid-sized U.S lenders over the past week analysts say that investors are fretting about potential runs on global bank deposits with contagion talks sweeping across trading floors yesterday while Swiss joined Credit Suisse announced borrowing to shore up liquidity the spotlight shifted back to the United States the shares of First Republic a regional lender had tumbled 70 percent in the last nine trading sessions some of the biggest U.S banking names including JPMorgan Chase Citigroup Bank of America Wells Fargo Goldman Sachs and Morgan Stanley are involved in the rescue U.S Regulators said that the show of support was most welcome and shows the resilience of the banking system this week's actions demonstrate our Resolute commitment to ensure that our financial system remains strong and the depositor's savings remain safe First Republic Bank is not the first Canary in the mind but there are canaries that are now feed up and those include things like Silicon Valley Bank Signature Bank and lots of worry about Credit Suisse the storage financial institution in a market all prophecies are self-fulfilling so if people begin to feel like a bank is going to fail they pull their money and they tell everyone this bank is going to fail and almost no matter how stable the bank was when the Story begins this begins to sap the confidence deny the assets and create a situation where also none of the other players in the market want to stand next to you or want to do business with you a round of financing on Sunday raised through JP Morgan had given First Republic access to 70 billion dollars in funds but that fails to come the investors worries of a contagion deepened with the demise of Signature Bank to follow that of Silicon Valley Bank and depositors began moving cash to larger lenders First Republic Banks stock closed up 10 on news of the rescue but it shares fell 18 in aftermarket trading after the bank said that it would suspend its dividend news of the rescue also helped to boost Wall Street for indices smaller Banks also rebounded from the recent sell-off the Federal Reserve has lent U.S banks nearly 12 billion dollars under a new one-year lending program that was unveiled on Sunday night U.S treasury secretary said that authorities moved swiftly to protect depositors at Silicon Valley Bank and Signature Bank she said that authorities acted when they saw a serious risk of contagion that could have triggered runs on many banks well we felt that there was a serious risk of contagion that could have brought down and triggered runs on many banks and that something given that our judgment is that the banking system overall is safe and sound depositories should have confidence in the system and we took these actions as per the United States Central Bank the total outstanding amount of advances under the bank term funding program reached 11.9 billion dollars on Wednesday for more on this we are now being joined by Syed Javed Hassan who is an economic columnist and former chairman of the economic Advisory Group Mr Hassan is joining us from Islamabad sir thank you very much for speaking with weon thank you very much for having me so Banks coming to the rescue of banks first Swiss Central Bank rescues credit space now Consortium of 11 banks have come to the rescue of First Republic is the crisis averted or does it run deep well we should start with the Silicon Valley Bank for that the Federal Reserve had to invoke the risk and systemic risk risk as an exception for depositors now let me explain this a bit the U.S banks have a insurance policy of about through physic where there's about 250 000 of uh deposits are insured by the physics system now it was felt that this would not be enough to avert the crisis on further back so the for the first time in a long period this Federal Federal Reserve has invoked the systemic risk exception so there's obviously a fair there's a systemic risk and we are beginning to see that as you've mentioned Signature Bank uh Federal uh the Federal Bank all of these things now on top of that we have had the Credit Suisse debacle now we have seen something like 120 billion dollars of deposits being withdrawn from Credit Suisse the Central Bank of Switzerland has come and allowed a credit line of 50 billion now it remains to be seen if we have averted the crisis uh the noise is the right one being made the fact that 30 billion dollars have come through the major banks in the the US to support the Federal Bank all of that is is good news but it really remains to be seen whether we have averted the crisis because there's jitteriness among the depositors the smaller banks are seeing some deposits being withdrawn you see one day shares going up then the next day you are against these shares sliding down so I think it's a bit early to say whether the crisis has been averted uh the fact of the matter is the depositors are nervous about the smaller Banks all over and because some of the lending policies have been very liberal and and there is concern that whether these smaller banks will be able to sustain the the the the crisis there is and as you mentioned and there's the self-fulfilling promise issue that uh the the fact that people fear that there's going to be a a a collapse they withdraw money and that leads to the collapse anyway so I I think it's good measures that have been taken by the Federal Reserve Bank in the U.S the Swiss Central Bank but it remains to be seen whether or the crisis whether in Credit Suisse or the other smaller banks in the US has been completely averted so uh build these bailouts that are now happening incentivize risky behavior and you know Foster uh what is called too big a bank to fail mentality I think I think we are already beginning we're already seeing some effect of that the fact that in 2008 the two big uh too duping to fail for dominant happen and there was a major pumping in of liquidity by The Reserve Bank in the U.S as well as other Banks across the world has probably fostered this uh attitudes towards uh being a bit careless about lending policies even though they were strengthening and there was quite a lot of measures taken to avoid it but the very factor of the matter that we are seeing what we are seeing with SVP and other Banks suggests that uh that that there has been a sort of fostering of uh careless policies by the Banks themselves and now as I said I do not want to be one of those who actually promote the idea of self-fulfilling promise I would like to think that the measures taken by the central bank as both in Switzerland and the Us and other Banks across the world will now contain the crisis uh but the Contagion is there there is fear among the positives and we are seeing withdrawals I mean Swiss credit Swiss we saw a withdrawal of something like 120 billion dollars of uh deposits being taken out you're saying similarly in the U.S signature bank so that is the problem the depositors need to be somehow calmed we are not sure we have really crossed that bridge yet so uh uh let's explore that point a little bit further what does this mean what we are witnessing now to the businesses with the deposits in these Banks what should they do that's that's a really tricky question I I would want to advise every businessman not not to start not participate in the crisis and not withdraw uh their their funds especially given the support that we are seeing from the Federal Reserves as well as the larger Banks but having said that uh it is for the individual businesses to decide uh you do not want to precipitate a crisis but uh obviously the the businesses and and individuals have to take their own uh their own decisions and and given that there is some degree of uh concern about the lending policies and the riskiness of uh assets there is on on the books of any of these Banks uh obviously every every depositor every business has to take its own decision and and and and they should be talking to experts as to the health of the balance sheets of individual Banks yes one final question to you yes sir so uh sorry this was very careless and and and and we are seeing the consequences of that yes uh so will Banks once again get away without being punished for what some call too riskier Behavior you know the thing is the problem is that if banks get punished the whole world gets punished we all get punished economy is going to a slump there could be a major recession we have just come out of covet so while there is a inclination that you want to see a better Behavior by the Banks we certainly want to avoid punishment because that would punish all of us all right Mr Hassan thanks very much for speaking with Beyond joining us from Islamabad and welcome our top focus of this are the collapse of Silicon Valley Bank last week raised questions about what else might be lurking in the wider system within days the market turmoil and snare Swiss lender Credit Suisse forcing it to borrow up to 54 billion dollars from Switzerland central bank now large U.S banks have injected 30 billion dollars in deposits into First Republic Bank U.S banks have rushed to the rescue of First Republic Bank the lender is caught up in a widening crisis triggered by the collapse of two other mid-sized U.S lenders over the past week only say investors are fretting about potential rounds on global bank deposits with contagion torque sweeping across trading floors yesterday while three's giant Credit Suisse announced boring to show up liquidity the spotlight shifted back to the United States the shares of First Republic a regional lender had tumbled 70 in the first nine trading sessions some of the biggest U.S banking names including JP Morgan Chase City Group Bank of America Wells Fargo Goldman Sachs and Morgan Stanley are involved in the rescue U.S Regulators said the show of supporters most welcome and shows the resilience of the banking system foreign this week's actions demonstrate our Resolute commitment to ensure that our financial system remains strong and the depositors savings remain safe First Republic Bank is not the first Canary in the mind but there are canaries that are now feet up and those include things like Silicon Valley Bank Signature Bank and lots of worry about Credit Suisse the storage financial institution in a market all prophecies are self-fulfilling so if people begin to feel like a bank is going to fail they pull their money and they tell everyone this bank is going to fail and almost no matter how stable the bank was when the Story begins this begins to sap the confidence deny the assets and create a situation where also none of the other players in the market want to stand next to you or want to do business with you around on financing on Sunday rates through JP Morgan and had given fast Republic access to 70 billion dollars in funds but that failed to come investors worries of a contagion deepen through the demise of Signature Bank to follow that of Silicon Valley and deposits has begun moving costs to larger lenders First Republic Banks stock closed up 10 percent on news of the rescue but its shares fell 18 after after market trading after the bank said it would suspend its dividend the use of the rescue also helped boost wall Street's indices smaller Banks also rebounded from the recent sell-off the Federal Reserve has lent U.S banks nearly 12 billion dollars and a new one-year lending program unveiled on Sunday U.S treasury secretary said authorities moved swiftly to protect depositors at Silicon Valley Bank and Signature Bank she said authorities acted when they saw a serious risk of contingent that could have triggered rounds on many bunks will we felt that there was a serious risk of contagion that could have brought down and triggered runs on many banks and that something given that our judgment is that the banking system overall is safe and sound depositors should have confidence in the system and we took these actions asked by the U.S Central Bank the totally outstanding amount of advances under the bankster and funding program reached 11.9 billion dollars on by Wednesday our top story the collapse of Silicon Valley Bank last week raised questions about what else might be lurking in the wider system within days the market turmoil ensnared Swiss Lander credit Suites forcing it to borrow up to 54 billion dollars from Switzerland's central bank now large U.S banks have injected 30 billion dollars in deposits into First Republic Bank U.S banks have rushed to the rescue of the First Republic Bank the lender is caught up in a widening crisis triggered by the collapse of two other mid-sized U.S lenders over the past week analysts say that investors are fretting about potential runs on global bank deposits with contagion talks sweeping across trading floors yesterday while Swiss joined Credit Suisse announced borrowing to shore up liquidity the spotlight shifted back to the United States the shares of First Republic a regional lender had tumbled 70 percent in the last nine trading sessions some of the biggest U.S banking names including JPMorgan Chase Citigroup Bank of America Wells Fargo Goldman Sachs and Morgan Stanley are involved in the rescue U.S Regulators said that the show of support was most welcome and shows the resilience of the banking system this week's actions demonstrate our Resolute commitment to ensure that our financial system remains strong and that depositors savings remain safe First Republic Bank is not the first Canary in the mind but there are canaries that are now feed up and those include things like Silicon Valley Bank Signature Bank and lots of worry about Credit Suisse storage financial institution in a market all prophecies are self-fulfilling so if people begin to feel like a bank is going to fail they pull their money and they tell everyone this bank is going to fail and almost no matter how stable the bank was when the Story begins this begins to sap the confidence deny the assets and create a situation where also none of the other players in the market want to stand next to you or want to do business with you a round of financing on Sunday raised through JP Morgan had given First Republic access to 70 billion dollars in funds but that fails to come the investors worries of a contagion deepened with the demise of Signature Bank to follow that of Silicon Valley Bank and depositors began moving cash to larger lenders First Republic Banks stock closed up 10 on news of the rescue but its shares fell 18 in aftermarket trading after the bank said that it would suspend its dividend news of the rescue also helped to boost Wall Street indices smaller Banks also rebounded from the recent sell-off the Federal Reserve has lent U.S banks nearly 12 billion dollars under a new one-year lending program that was unveiled on Sunday night U.S treasury secretary said that authorities moved swiftly to protect depositors at Silicon Valley Bank and Signature Bank she said that authorities acted when they saw a serious risk of contagion that could have triggered runs on many banks well we felt that there was a serious risk of contagion that could have brought down and triggered runs on many banks and that something given that our judgment is that the banking system overall is safe and sound depositories should have confidence in the system and we took these actions as per the United States Central Bank the total outstanding amount of advances under the bank term funding program reached 11.9 billion dollars on Wednesday for more on this we are now being joined by Syed Javed Hassan who is an economic columnist and former chairman of the economic Advisory Group Mr Hassan is joining us from Islamabad sir thank you very much for speaking with weon thank you very much for having me so Banks coming to the rescue of banks first Swiss Central Bank rescues Credit Suisse now Consortium of 11 banks have come to the rescue of First Republic is the crisis averted or does it run deep well we should start with the Silicon Valley Bank for that the Federal Reserve had to invoke the risk and systemic risk risk as an exception for depositors now let me explain this a bit the U.S banks have a insurance policy of about through physic where there's about 250 000 of uh deposits are insured by the physics system now it was felt that this would not be enough to avert the crisis on further back so the for the first time in a long period this Federal Federal Reserve has invoked the systemic risk exception so there's obviously a fair there's a systemic risk and we are beginning to see that as you've mentioned Signature Bank uh Federal uh the Federal Bank all of these things now on top of that we have had the Credit Suisse debacle now we have seen something like 120 billion dollars of deposits being withdrawn from Credit Suisse the Central Bank of Switzerland has come and allowed a credit line of 50 billion now it remains to be seen if we have averted the crisis uh the noise is the right one being made the fact that 30 billion dollars have come through the major banks in the the U.S to support the Federal Bank all of that is is good news but it really remains to be seen whether we have averted the crisis because there's jitteriness among the depositors the smaller banks are seeing some deposits being withdrawn you see one day shares going up then the next day you are against these years sliding down so I think it's a bit early to say whether the crisis has been averted uh the fact of the matter is the depositors are nervous about the smaller Banks all over and because some of the lending policies have been very liberal and and there is concern that whether these smaller banks will be able to sustain the the the crisis there is and as you mentioned there's the self-fulfilling promise issue that uh the the fact that people fear that there's going to be a a a collapse they withdraw money and that leads to the collapse anyway so uh I think it's good measures that have been taken by the Federal Reserve Bank in the U.S the Swiss Central Bank but it remains to be seen whether or the crisis Within credit suis or the other smaller banks in the U.S has been completely averted so uh will these bailouts that are now happening incentivize risky behavior and you know Foster uh what is called too big a bank to fail mentality I think I think we are already beginning we're already seeing some effect of that the fact that in 2008 the two big uh too too big to fail predominant happened and there was a major pumping in of liquidity by The Reserve Bank in the U.S as well as other Banks across the world has probably fostered this uh attitudes towards uh being a bit careless about lending policies even though they were strengthening and there was quite a lot of measures taken to avoid it but the very factor of the matter that we are seeing what we are seeing with SVP and other Banks suggests that uh that that there has been a sort of fostering of uh careless policies by the Banks themselves and now as I said I do not want to be one of those who actually promote the idea of self-fulfilling promise I would like to think that the measures taken by the central bank is both in Switzerland and the Us and other Banks across the world will now contain the crisis uh but the contagion is there there is fear among the positives and we are seeing withdrawals I mean Swiss credit Swiss we saw a withdrawal of something like 120 billion dollars of uh deposits being taken out you're saying similarly in the U.S signature bank so that is the problem the depositors need to be somehow calmed we are not sure we have really crossed that bridge yet so uh uh let's explore that point a little bit further what does this mean what we are witnessing now to the businesses with the deposits in these Banks what should they do that's that's a really tricky question I I would want to advise every businessman not not to start not participate in the crisis and not withdraw uh their their funds especially given the support that we are seeing from the Federal Reserves as well as the larger Banks but having said that uh it is for the individual businesses to decide uh you do not want to precipitate a crisis but uh obviously the the businesses and and individuals have to take their own uh their own decisions and and given that there is some degree of uh concern about the lending policies and the riskiness of uh assets there is on on the books of any of these Banks uh obviously every every depositor every business has to take its own decision and and and and they should be talking to experts as to the health of the balance sheets of individual Banks yes one final question to you yes sir so uh sorry one final question this was very careless and and and and we are seeing the consequences of that yes uh so will Banks once again get away without being punished for what some call too riskier Behavior you know the thing is the problem is that if banks get punished the whole world gets punished we all get punished economy is going to a slump there could be a major recession we have just come out of covet so while there is a inclination that you want to see a better Behavior by the Banks we certainly want to avoid punishment because that would punish all of us all right Mr Hassan thanks very much for speaking with Beyond joining us from Islamabad and welcome our top focus of this are the collapse of Silicon Valley Bank last week raised questions about what else might be lurking in the wider system within days the market turmoil and snare Swiss lender Credit Suisse forcing it to borrow up to 54 billion dollars from Switzerland central bank now large U.S banks have injected 30 billion dollars in deposits into First Republic Bank U.S banks have rushed to the rescue of First Republic Bank the lender is caught up in a widening crisis triggered by the collapse of two other mid-sized U.S lenders over the past week only say investors are fretting about potential runs on global bank deposits with contagion torque sweeping across trading floors yesterday while three's giant Credit Suisse announced boring to show up liquidity the spotlight shifted back to the United States the shares of First Republic a regional lender had tumbled 70 in the first nine trading sessions some of the biggest U.S banking names including JP Morgan Chase City Group Bank of America Wells Fargo Goldman Sachs and Morgan Stanley are involved in the rescue U.S regulator said the show of supporters most welcome ensures the resilience of the banking system foreign this week's actions demonstrate our Resolute commitment to ensure that our financial system remains strong and that depositors savings remain safe First Republic Bank is not the first Canary in the mind but there are canaries that are now feet up and those include things like Silicon Valley Bank Signature Bank and lots of worry about Credit Suisse the storage financial institution in a market all prophecies are self-fulfilling so if people begin to feel like a bank is going to fail they pull their money and they tell everyone this bank is going to fail and almost no matter how stable the bank was when the Story begins this begins to sap the confidence deny the assets and create a situation where also none of the other players in the market want to stand next to you or want to do business with you around on financing on Sunday raised through JP Morgan and had given fast Republic access to 70 billion dollars in funds but that failed to come investors worries of a contagion deepen through the demise of Signature Bank to follow that of Silicon Valley and deposits has begun moving costs to larger lenders First Republic Banks stock closed up 10 percent on news of the rescue but its shares fell 18 after after market trading after the bank said it would suspend its dividend the use of the rescue also helped boost wall Street's indices smaller Banks also rebounded from the recent sell-off the Federal Reserve has lent U.S banks nearly 12 billion dollars and a new one-year lending program unveiled on Sunday U.S treasury secretary said authorities moved swiftly to protect depositors at Silicon Valley Bank and Signature Bank she said authorities acted when they saw a serious risk of contingent that could have triggered rounds on many bunks will we felt that there was a serious risk of contagion that could have brought down and triggered runs on many banks and that something given that our judgment is that the banking system overall is safe and sound depositors should have confidence in the system and we took these actions asked by the U.S Central Bank the tortellin outstanding amount of advances under the bankster and funding program reached 11.9 billion dollars on by Wednesday our top story the collapse of Silicon Valley Bank last week raised questions about what else might be lurking in the wider system within days the market turmoil ensnared Switz lender credit Suites forcing it to borrow up to 54 billion dollars from Switzerland's central bank now large U.S banks have injected 30 billion dollars in deposits into First Republic Bank U.S banks have rushed to the rescue of the First Republic Bank the lender is caught up in a widening crisis triggered by the collapse of two other mid-sized U.S lenders over the past week analysts say that investors are fretting about potential runs on global bank deposits with contagion talks sweeping across trading floors yesterday while Swiss joined Credit Suisse announced borrowing to shore up liquidity the spotlight shifted back to the United States the shares of First Republic a regional lender had tumbled 70 percent in the last nine trading sessions some of the biggest U.S banking names including JPMorgan Chase Citigroup Bank of America Wells Fargo Goldman Sachs and Morgan Stanley are involved in the rescue U.S Regulators said that the show of support was most welcome and shows the resilience of the banking system this week's actions demonstrate our Resolute commitment to ensure that our financial system remains strong and the depositors savings remain safe First Republic Bank is not the first Canary in the mind but there are canaries that are now feed up and those include things like Silicon Valley Bank Signature Bank and lots of worry about Credit Suisse the storage financial institution in a market all prophecies are self-fulfilling so if people begin to feel like a bank is going to fail they pull their money and they tell everyone this bank is going to fail and almost no matter how stable the bank was when the Story begins this begins to sap the confidence deny the assets and create a situation where also none of the other players in the market want to stand next to you or want to do business with you a round of financing on Sunday raised through JP Morgan had given First Republic access to 70 billion dollars in funds but that failed to come the investors worries of a contagion deepened with the demise of Signature Bank to follow that of Silicon Valley Bank and depositors began moving cash to larger lenders First Republic Banks stock closed up 10 on news of the rescue but it shares fell 18 in aftermarket trading after the bank said that it would suspend its dividend news of the rescue also helped to boost Wall Street for indices smaller Banks also rebounded from the recent sell-off the Federal Reserve has lent U.S banks nearly 12 billion dollars under a new one-year lending program that was unveiled on Sunday night U.S treasury secretary said that authorities moved swiftly to protect depositors at Silicon Valley Bank and Signature Bank she said that authorities acted when they saw a serious risk of contagion that could have triggered runs on many banks well we felt that there was a serious risk of contagion that could have brought down and triggered runs on many banks and that something given that our judgment is that the banking system overall is safe and sound depositories should have confidence in the system and we took these actions as per the United States Central Bank the total outstanding amount of advances under the bank term funding program reached 11.9 billion dollars on Wednesday for more on this we are now being joined by Syed Javed Hassan who is an economic columnist and former chairman of the economic Advisory Group Mr Hassan is joining us from Islamabad sir thank you very much for speaking with weon thank you very much for having me so Banks coming to the rescue of banks first Swiss Central Bank rescues Credit Suisse now Consortium of 11 banks have come to the rescue of First Republic is the crisis averted or does it run deep well we should start with the Silicon Valley Bank for that the Federal Reserve had to invoke the risk and systemic risk risk as an exception for depositors now let me explain this a bit the U.S banks have a insurance policy of about through physic where there's about 250 000 of uh deposits are insured by the physics system now it was felt that this would not be enough to avert the crisis on further back so the for the first time in a long period this Federal Federal Reserve has invoked the systemic risk exception so there's obviously a fair there's a systemic risk and we are beginning to see that as you mentioned Signature Bank uh Federal uh the Federal Bank all of these things now on top of that we have had the Credit Suisse debacle now we have seen something like 120 billion dollars of deposits being withdrawn from Credit Suisse the Central Bank of Switzerland has come and allowed a credit line of 50 billion now it remains to be seen if we have averted the crisis uh the noise is the right one being made the fact that 30 billion dollars have come through the major banks in the the US to support the Federal Bank all of that is is good news but it really remains to be seen whether we have averted the crisis because there's jitteriness among the depositors the smaller banks are seeing some deposits being withdrawn you see one day shares going up then the next day you are against these shares sliding down so I think it's a bit early to say whether the crisis has been averted uh the fact of the matter is the depositors are nervous about the smaller Banks all over and because some of the lending policies have been very liberal and and there is concern that whether these smaller banks will be able to sustain the the the the crisis there is and as you mentioned and there's the self-fulfilling promise issue that uh the the fact that people fear that there's going to be a a a collapse they withdraw money and that leads to the collapse anyway so I I think it's good measures that have been taken by the Federal Reserve Bank in the U.S the Swiss Central Bank but it remains to be seen whether or the crisis whether in Credit Suisse or the other smaller banks in the U.S has been completely averted so uh will these bailouts that are now happening incentivize risky behavior and you know Foster uh what is called too big a bank to fail mentality I think I think we are already beginning we're already seeing some effect of that the fact that in 2008 the two big uh too too big to fail for dominant happen and there was a major pumping in of liquidity by The Reserve Bank in the U.S as well as other Banks across the world has probably fostered this attitudes towards uh being a bit careless about lending policies even though they were strengthening and there was quite a lot of measures taken to avoid it but the very factor of the matter that we are seeing what we are seeing with SVP and other Banks suggests that uh that that there has been a sort of fostering of uh careless policies by the Banks themselves and now as I said I do not want to be one of those who actually promote the idea of self-fulfilling promise I would like to think that the measures taken by the central bank as both in Switzerland and the Us and other Banks across the world will now contain the crisis uh but the contagion is there there is fear among the positives and we are seeing withdrawals I mean Swiss credit students we saw a withdrawal of something like 120 billion dollars of uh deposits being taken out you're saying in the U.S signature bank so that is the problem the depositors need to be somehow calmed we are not sure we have really crossed that bridge yet so uh uh let's explore that point a little bit further what does this mean what we are witnessing now to the businesses with the deposits in these Banks what should they do that's that's a really tricky question I I would want to advise every businessman not not to start not participate in the crisis and not withdraw uh their their funds especially given the support that we are seeing from the Federal Reserves as well as the larger Banks but having said that uh it is for the individual businesses to decide uh you do not want to precipitate a crisis but uh obviously the the businesses and and individuals have to take their own uh their own decisions and and given that there is some degree of uh concern about the lending policies and the riskiness of uh assets there is on on the books of any of these Banks uh obviously every every depositor every business has to take its own decision and and and and they should be talking to experts as to the health of the balance sheets of individual Banks yes one final question to you yes sir so uh sorry one final question this was very careless and and and and we are seeing the consequences of that yes uh so will Banks once again get away without being punished for what some call too riskier Behavior you know the thing is the problem is that if banks get punished the whole world gets punished we all get punished economy is going to a slump there could be a major recession we have just come out of covet so while there is a inclination that you want to see a better Behavior by the Banks we certainly want to avoid punishment because that would punish all of us all right Mr Hassan thanks very much for speaking with Beyond joining us from Islamabad and welcome our top focus of this are the collapse of Silicon Valley Bank last week raised questions about what else might be lurking in a wider system within days the market turmoil and snare Swiss blender Credit Suisse forcing it to borrow up to 54 billion dollars from Switzerland central bank now large U.S banks have injected 30 billion dollars in deposits into First Republic Bank U.S banks have rushed to the rescue of First Republic Bank the lender is caught up in a widening crisis triggered by the collapse of two other mid-sized U.S lenders over the past week only say investors are fretting about potential runs on global bank deposits with contagion torque sweeping across trading floors yesterday while three's giant Credit Suisse announced boring to show up liquidity the spotlight shifted back to the United States the shares of First Republic a regional lender had tumbled 70 in the first nine trading sessions some of the biggest U.S banking names including JP Morgan Chase City Group Bank of America Wells Fargo Goldman Sachs and Morgan Stanley are involved in the rescue U.S Regulators said the show of supporters most welcome ensures the resilience of the banking system foreign this week's actions demonstrate our Resolute commitment to ensure that our financial system remains strong and that depositors savings remain safe First Republic Bank is not the first Canary in the mind but there are canaries that are now feet up and those include things like Silicon Valley Bank Signature Bank and lots of worry about Credit Suisse the storage financial institution in a market all prophecies are self-fulfilling so if people begin to feel like a bank is going to fail they pull their money and they tell everyone this bank is going to fail and almost no matter how stable the bank was when the Story begins this begins to sap the confidence deny the assets and create a situation where also none of the other players in the market want to stand next to you or want to do business with you around on financing on Sunday rates through JP Morgan and had given fast Republic access to 70 billion dollars in funds but that failed to come investors worries of a contagion deepen through the demise of Signature Bank to follow that of Silicon Valley and deposits has begun moving costs to larger lenders First Republic Banks stock closed up 10 percent on news of the rescue but its shares fell 18 after after market trading after the bank said it would suspend its dividend the use of the rescue also helped boost wall Street's indices smaller Banks also rebounded from the recent sell-off the Federal Reserve has lent U.S banks nearly 12 billion dollars and a new one-year lending program unveiled on Sunday U.S treasury secretary said authorities moved swiftly to protect depositors at Silicon Valley Bank and Signature Bank she said authorities acted when they saw a serious risk of contingent that could have triggered rounds on many banks will we felt that there was a serious risk of contagion that could have brought down and triggered runs on many banks and that something given that our judgment is that the banking system overall is safe and sound depositors should have confidence in the system and we took these actions asked by the U.S Central Bank the totally outstanding amount of advances under the bankster and funding program reached 11.9 billion dollars on by Wednesday our top story the collapse of Silicon Valley Bank last week raised questions about what else might be lurking in the wider system within days the market turmoil ensnared Switz lender credit Suites forcing it to borrow up to 54 billion dollars from Switzerland's central bank now large U.S banks have injected 30 billion dollars in deposits into First Republic Bank U.S banks have rushed to the rescue of the First Republic Bank the lender is caught up in a widening crisis triggered by the collapse of two other mid-sized U.S lenders over the past week analysts say that investors are fretting about potential runs on global bank deposits with contagion talks sweeping across trading floors yesterday while Swiss joined Credit Suisse announced borrowing to shore up liquidity the spotlight shifted back to the United States the shares of First Republic a regional lender had tumbled 70 percent in the last nine trading sessions some of the biggest U.S banking names including JPMorgan Chase Citigroup Bank of America Wells Fargo Goldman Sachs and Morgan Stanley are involved in the rescue U.S Regulators said that the show of support was most welcome and shows the resilience of the banking system this week's actions demonstrate our Resolute commitment to ensure that our financial system remains strong and that depositors savings remain safe First Republic Bank is not the first Canary in the mind but there are canaries that are now feed up and those include things like Silicon Valley Bank Signature Bank and lots of worry about Credit Suisse the storage financial institution in a market all prophecies are self-fulfilling so if people begin to feel like a bank is going to fail they pull their money and they tell everyone this bank is going to fail and almost no matter how stable the bank was when the Story begins this begins to sap the confidence deny the assets and create a situation where also none of the other players in the market want to stand next to you or want to do business with you a round of financing on Sunday raised through JP Morgan had given First Republic access to 70 billion dollars in funds but that fails to come the investors worries of a contagion deepened with the demise of Signature Bank to follow that of Silicon Valley Bank and depositors began moving cash to larger lenders First Republic bank's stock closed up 10 on news of the rescue but it shares fell 18 in aftermarket trading after the bank said that it would suspend its dividend news of the rescue also helped boost Wall Street for indices smaller Banks also rebounded from the recent sell-off the Federal Reserve has lent U.S banks nearly 12 billion dollars under a new one-year lending program that was unveiled on Sunday night U.S treasury secretary said that authorities moved swiftly to protect depositors at Silicon Valley Bank and Signature Bank she said that authorities acted when they saw a serious risk of contagion that could have triggered runs on many banks well we felt that there was a serious risk of contagion that could have brought down and triggered runs on many banks and that something given that our judgment is that the banking system overall is safe and sound depositories should have confidence in the system and we took these actions as for the United States Central Bank the total outstanding amount of advances under the bank term funding program reached 11.9 billion dollars on Wednesday for more on this we are now being joined by Syed Javed Hassan who is an economic columnist and former chairman of the economic Advisory Group Mr Hassan is joining us from Islamabad sir thank you very much for speaking with weon thank you very much for having me so Banks coming to the rescue of banks first Swiss Central Bank rescues Credit Suisse now Consortium of 11 banks have come to the rescue of First Republic is the crisis averted or does it run deep well we should start with the Silicon Valley Bank for that the Federal Reserve had to invoke the risk and systemic risk risk as an exception for depositors now let me explain this a bit the U.S banks have a insurance policy of about through physic where there's about 250 000 of uh deposits are insured by the physics system now it was felt that this would not be enough to avert the crisis on further back so the for the first time in a long period this Federal Federal Reserve has invoked the systemic risk exception so there's obviously a fair there's a systemic risk and we are beginning to see that as you mentioned Signature Bank uh Federal uh the Federal Bank all of these things now on top of that we have had the Credit Suisse debacle now we have seen something like 120 billion dollars of deposits being withdrawn from Credit Suisse the Central Bank of Switzerland has come and allowed a credit line of 50 billion now it remains to be seen if we have averted the crisis uh the noise is the right one being made the fact that 30 billion dollars have come through the major banks in the the US to support the Federal Bank all of that is is good news but it really remains to be seen whether we have averted the crisis because there's jitteriness among the depositors the smaller banks are seeing some deposits being withdrawn you see one day shares going up then the next day you are against these shares sliding down so I think it's a bit early to say whether the crisis has been averted uh the fact of the matter is the depositors are nervous about the smaller Banks all over and because some of the lending policies have been very liberal and and there is concern that whether these smaller banks will be able to sustain the the the the crisis there is and as you mentioned and there's the self-fulfilling promise issue that uh the the fact that people fear that there's going to be a a a collapse they withdraw money and that leads to the collapse anyway so I I think it's good measures that have been taken by the Federal Reserve Bank in the U.S the Swiss Central Bank but it remains to be seen whether or the crisis whether in Credit Suisse or the other smaller banks in the U.S has been completely averted so uh will these bailouts that are now happening incentivize risky behavior and you know Foster uh what is called too big a bank to fail mentality I think I think we are already beginning we're already seeing some effect of that the fact that in 2008 the two big uh too too big to fail predominant happened and there was a major pumping in of liquidity by The Reserve Bank in the U.S as well as other Banks across the world has probably fostered this uh attitudes towards uh being a bit careless about lending policies even though they were strengthening and there was quite a lot of measures taken to avoid it but the very factor of the matter that we are seeing what we are seeing with SVP and other Banks suggests that uh that that there has been a sort of fostering of uh careless policies by the Banks themselves and now as I said I do not want to be one of those who actually promote the idea of self-fulfilling promise I would like to think that the measures taken by the central bank as both in Switzerland and the Us and other Banks across the world will now contain the crisis uh but the contagion is there there is fear among the positives and we are seeing withdrawals I mean Swiss credit Swiss we saw a withdrawal of something like 120 billion dollars of uh deposits being taken out you're saying in the U.S signature bank so that is the problem the depositors need to be somehow calmed we are not sure we have really crossed that bridge yet so uh uh let's explore that point a little bit further what does this mean what we are witnessing now to the businesses with the deposits in these Banks what should they do that's that's a really tricky question I I would want to advise every businessman not not to start not participate in the crisis and not withdraw uh their their funds especially given the support that we are seeing from the Federal Reserves as well as the larger Banks but having said that uh it is for the individual businesses to decide uh you do not want to precipitate a crisis but uh obviously the the businesses and and individuals have to take their own uh there is on on the books of any of these Banks uh obviously every every depositor every business has to take its own decision and and and and they should be talking to experts as to the health of the balance sheets of individual Banks yes one final question to you yes sir so uh sorry one final question was very careless and and and we are seeing the consequences of that yes uh so will Banks once again get away without being punished for what some call too riskier Behavior you know the thing is the problem is that if banks get punished the whole world gets punished we all get punished economy is going to a slump there could be a major recession we have just come out of covet so while there is a inclination that you want to see a better Behavior by the Banks we certainly want to avoid punishment because that would punish all of us all right Mr Hassan thanks very much for speaking with Beyond joining us from Islamabad and welcome our top focus of this are the collapse of Silicon Valley Bank last week raised questions about what else might be lurking in the wider system within days the market turmoil and snared swiss lender credly Swiss forcing it to borrow up to 54 billion dollars from Switzerland central bank now large U.S banks have injected 30 billion dollars in deposits into First Republic Bank U.S banks have rushed to the rescue of First Republic Bank the lender is caught up in a widening crisis triggered by the collapse of two other mid-sized U.S lenders over the past week only say investors are fretting about potential runs on global bank deposits with contagion torque sweeping across trading floors yesterday while three's giant Credit Suisse announced boring to show up liquidity the spotlight shifted back to the United States the shares of First Republic a regional lender had tumbled 70 in the first nine trading sessions some of the biggest U.S banking names including JP Morgan Chase City Group Bank of America Wells Fargo Goldman Sachs and Morgan Stanley are involved in the rescue U.S regulator Sage the show of support is most welcome ensures the resilience of the banking system foreign this week's actions demonstrate our Resolute commitment to ensure that our financial system remains strong and the depositor's savings remain safe First Republic Bank is not the first Canary in the mind but there are canaries that are now feet up and those include things like Silicon Valley Bank Signature Bank and lots of worry about Credit Suisse the storage financial institution in a market all prophecies are self-fulfilling so if people begin to feel like a bank is going to fail they pull their money and they tell everyone this bank is going to fail and almost no matter how stable the bank was when the Story begins this begins to sap the confidence deny the assets and create a situation where also none of the other players in the market want to stand next to you or want to do business with you around on financing on Sunday rates through JP Morgan and had given fast Republic access to 70 billion dollars in funds but that failed to come investors worries of a contagion deepen through the demise of Signature Bank to follow that of Silicon Valley and deposits has begun moving costs to larger lenders First Republic Banks stock closed up 10 percent on news of the rescue but its shares fell 18 after after market trading after the bank said it would suspend its dividend the use of the rescue also helped boost wall Street's indices smaller Banks also rebounded from the recent sell-off the Federal Reserve has lent U.S banks nearly 12 billion dollars and a new one-year lending program unveiled on Sunday U.S treasury secretary said authorities moved swiftly to protect depositors at Silicon Valley Bank and Signature Bank she said authorities acted when they saw a serious risk of contingent that could have triggered rounds on many bunks will we felt that there was a serious risk of contagion that could have brought down and triggered runs on many banks and that something given that our judgment is that the banking system overall is safe and sound depositors should have confidence in the system and we took these actions asked by the U.S Central Bank the tortellin outstanding amount of advances under the bankster and funding program reached 11.9 billion dollars on by Wednesday our top story the collapse of Silicon Valley Bank last week raised questions about what else might be lurking in the wider system within days the market turmoil ensnared Swiss lender credit Suites forcing it to borrow up to 54 billion dollars from Switzerland's central bank now large U.S banks have injected 30 billion dollars in deposits into First Republic Bank U.S banks have rushed to the rescue of the First Republic Bank the lender is caught up in a widening crisis triggered by the collapse of two other mid-sized U.S lenders over the past week analysts say that investors are fretting about potential runs on global bank deposits with contagion talks sweeping across trading floors yesterday while Swiss joined Credit Suisse announced borrowing to shore up liquidity the spotlight shifted back to the United States the shares of First Republic a regional lender had tumbled 70 percent in the last nine trading sessions some of the biggest U.S banking names including JPMorgan Chase Citigroup Bank of America Wells Fargo Goldman Sachs and Morgan Stanley are involved in the rescue U.S Regulators said that the show of support was most welcome and shows the resilience of the banking system this week's actions demonstrate our Resolute commitment to ensure that our financial system remains strong and the depositor's savings remain safe First Republic Bank is not the first Canary in the mind but there are canaries that are now feed up and those include things like Silicon Valley Bank Signature Bank and lots of worry about Credit Suisse the storage financial institution in a market all prophecies are self-fulfilling so if people begin to feel like a bank is going to fail they pull their money and they tell everyone this bank is going to fail and almost no matter how stable the bank was when the Story begins this begins to sap the confidence deny the assets and create a situation where also none of the other players in the market want to stand next to you or want to do business with you a round of financing on Sunday raised through JP Morgan had given First Republic access to 70 billion dollars in funds but that fails to come the investors worries of a contagion deepened with the demise of Signature Bank to follow that of Silicon Valley Bank and depositors began moving cash to larger lenders First Republic bank's stock closed up 10 on news of the rescue but its shares fell 18 in aftermarket trading after the bank said that it would suspend its dividend news of the rescue also helped to boost Wall Street indices smaller Banks also rebounded from the recent sell-off the Federal Reserve has lent U.S banks nearly 12 billion dollars under a new one-year lending program that was unveiled on Sunday night U.S treasury secretary said that authorities moved swiftly to protect depositors at Silicon Valley Bank and Signature Bank she said that authorities acted when they saw a serious risk of contagion that could have triggered runs on many banks well we felt that there was a serious risk of contagion that could have brought down and triggered runs on many banks and that something given that our judgment is that the banking system overall is safe and sound depository should have confidence in the system and we took these actions as per the United States Central Bank the total outstanding amount of advances under the bank term funding program reached 11.9 billion dollars on Wednesday for more on this we are now being joined by Syed Javed Hassan who is an economic columnist and former chairman of the economic Advisory Group Mr Hassan is joining us from Islamabad sir thank you very much for speaking with weon thank you very much for having me so Banks coming to the rescue of banks first Swiss Central Bank rescues Credit Suisse now Consortium of 11 banks have come to the rescue of First Republic is the crisis averted or does it run deep well we should start with the Silicon Valley Bank for that the Federal Reserve had to invoke the risk and systemic risk risk as an exception for depositors now let me explain this a bit the U.S banks have a insurance policy of about through physic where there's about 250 000 of uh deposits are insured by the physics system now it was felt that this would not be enough to avert the crisis on further back so the for the first time in a long period these Federal Federal Reserve has invoked the systemic risk exception so there's obviously a fair there's a systemic risk and we are beginning to see that as you've mentioned Signature Bank uh Federal uh the Federal Bank all of these things now on top of that we have had the Credit Suisse debacle now we have seen something like 120 billion dollars of deposits being withdrawn from Credit Suisse the Central Bank of Switzerland has come and allowed a credit line of 50 billion now it remains to be seen if we have averted the crisis uh the noise is the right one being made the fact that 30 billion dollars have come through the major banks in the the U.S to support the Federal Bank all of that is is good news but it really remains to be seen whether we have averted the crisis because there's jitteriness among the depositors the smaller banks are seeing some deposits being withdrawn you see one day shares going up then the next day you are against these years sliding down so I think it's a bit early to say whether the crisis has been averted uh the fact of the matter is the depositors are nervous about the smaller Banks all over and because some of the lending policies have been very liberal and and there is concern that whether these smaller banks will be able to sustain the the the the crisis there is and as you mentioned there's the self-fulfilling promise issue that uh the the fact that people fear that there's going to be a a a collapse they withdraw money and that leads to the collapse anyway so uh I think it's good measures that have been taken by the Federal Reserve Bank in the U.S the Swiss Central Bank uh but it remains to be seen whether or the crisis Within credit suis or the other smaller banks in the U.S has been completely averted so uh build these bailouts that are now happening incentivize risky behavior and you know Foster uh what is called too big a bank to fail mentality I think I think we are already beginning we're already seeing some effect of that the fact that in 2008 the two big uh too too big to fail for dominant happen and there was a major pumping in of liquidity by The Reserve Bank in the U.S as well as other Banks across the world has probably fostered this uh attitudes towards uh being a bit careless about lending policies even though they were strengthening and there was quite a lot of measures taken to avoid it but the very factor of the matter that we are seeing what we are seeing with SVP and other Banks suggests that uh that that there has been a sort of fostering of uh careless policies by the Banks themselves and now as I said I do not want to be one of those who actually promote the idea of self-fulfilling promise I would like to think that the measures taken by the central bank is both in Switzerland and the Us and other Banks across the world will now contain the crisis uh but the Contagion is there there is fear among the positives and we are seeing withdrawals I mean Swiss credit Swiss we saw a withdrawal of something like 120 billion dollars of uh deposits being taken out you're saying similarly in the U.S signature bank so that is the problem the depositors need to be somehow calmed we are not sure we have really crossed that bridge yet so uh uh let's explore that point a little bit further what does this mean what we are witnessing now to the businesses with the deposits in these Banks what should they do that's that's a really tricky question I I would want to advise every businessman not not to start not participate in the crisis and not withdraw uh their their funds especially given the support that we are seeing from the Federal Reserves as well as the larger Banks but having said that uh it is for the individual businesses to decide uh you do not want to precipitate a crisis but uh obviously the the businesses and and individuals have to take their own uh their own decisions and and given that there is some degree of uh concern about the lending policies and the riskiness of uh assets there is on on the books of any of these Banks uh obviously every every depositor every business has to take its own decision and and and and they should be talking to experts as to the health of the balance sheets of individual Banks yes one final question to you yes sir so uh sorry one final question this was very careless and and and and we are seeing the consequences of that yes uh so will Banks once again get away without being punished for what some call too riskier Behavior you know the thing is the problem is that if banks get punished the whole world gets punished we all get punished economy is going to a slump there could be a major recession we have just come out of covet so while there is a inclination that you want to see a better Behavior by the Banks we certainly want to avoid punishment because that would punish all of us all right Mr Hassan thanks very much for speaking with Beyond joining us from Islamabad and welcome our top focus of this are the collapse of Silicon Valley Bank last week raised questions about what else might be lurking in the wider system within days the market turmoil and snared swiss lender Credit Suisse forcing it to borrow up to 54 billion dollars from Switzerland central bank now large U.S banks have injected 30 billion dollars in deposits into First Republic Bank U.S banks have rushed to the rescue of First Republic Bank the lender is caught up in a widening crisis triggered by the collapse of two other mid-sized U.S lenders over the past week only say investors are fretting about potential rounds on global bank deposits with contagion torque sweeping across trading floors yesterday while three's giant Credit Suisse announced boring to show up liquidity the spotlight shifted back to the United States the shares of First Republic a regional lender had tumbled 70 in the first nine trading sessions some of the biggest U.S banking names including JP Morgan Chase City Group Bank of America Wells Fargo Goldman Sachs and Morgan Stanley are involved in the rescue U.S Regulators said the show of supporters most welcome and shows the resilience of the banking system foreign this week's actions demonstrate our Resolute commitment to ensure that our financial system remains strong and that depositors savings remain safe First Republic Bank is not the first Canary in the mind but there are canaries that are now feet up and those include things like Silicon Valley Bank Signature Bank and lots of worry about Credit Suisse the storage financial institution in a market all prophecies are self-fulfilling so if people begin to feel like a bank is going to fail they pull their money and they tell everyone this bank is going to fail and almost no matter how stable the bank was when the Story begins this begins to sap the confidence deny the assets and create a situation where also none of the other players in the market want to stand next to you or want to do business with you around on financing on Sunday raised through JP Morgan and had given fast Republic access to 70 billion dollars in funds but that failed to come investors worries of a contagion deepen through the demise of Signature Bank to follow that of Silicon Valley and deposits has begun moving costs to larger lenders First Republic Banks stock closed up 10 percent on news of the rescue but its shares fell eighteen percent after after markets trading after the bank said it would suspend its dividend the use of the rescue also helped boost wall Street's indices smaller Banks also rebounded from the recent sell-off the Federal Reserve has lent U.S banks nearly 12 billion dollars and a new one-year lending program unveiled on Sunday U.S treasury secretary said authorities moved swiftly to protect depositors at Silicon Valley Bank and Signature Bank she said authorities acted when they saw a serious risk of contingent that could have triggered rounds on many bunks will we felt that there was a serious risk of contagion that could have brought down and triggered runs on many banks and that something given that our judgment is that the banking system overall is safe and sound depositors should have

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Keywords: WION Live, first republic bank, banking crisis, banking, financial crisis, crisis, us banking crisis, global banking crisis, financial crisis us banking sector crisis, us banking system, bank crisis in us, banking collapse, hunger crisis, banking sector, svb crisis, banking turmoil, silicon valley bank crisis, global banking system, credit suisse crisis, credit suisse crisis explained, moody's outlook on us banking system, signature bank in the us, bank, US News live, WION

Id: xwf-CixgZEc

Length: 237min 30sec (14250 seconds)

Published: Fri Mar 17 2023