US Treasury Secretary Janet Yellen said she is monitoring a few banks “very carefully” and that it’s a “matter of concern” that banks such as SVB Financial are experiencing financial losses.
(Bloomberg) — US Treasury Secretary Janet Yellen said she is monitoring a few banks “very carefully” and that it’s a “matter of concern” that banks such as SVB Financial are experiencing financial losses.
“You mentioned Silicon Valley Bank — there are recent developments that concern a few banks that I’m monitoring very carefully,” Yellen said Friday after Arizona Republican David Schweikert asked her if she was concerned about bond-market stresses originating from the SVB issues.
“When banks experience financial losses, it is and should be a matter of concern,” she said in a House Ways and Means Committee hearing Friday, without naming any specific lenders.
Yellen’s comment echoes that of White House Economic Adviser Bharat Ramamurti, who also said earlier Friday the Treasury monitoring SVB Financial “very carefully” as shares in the firm plummet.
“I don’t want to say more than that right now, but I want to assure the viewers that this is something we are on top of,” he told CNBC, while adding that this is a “highly fluid situation.”
“And your question is the right one — is this something that is going to spread into a more systemic issue,” he said.
The bank’s shares fell by as much as 69% in premarket trading on Friday before trading was halted.
The company’s stock tumbled following surprise announcement Wednesday from the Santa Clara, California-based bank holding company that it was issuing $2.25 billion of shares to bolster its capital position after a significant loss on its investment portfolio. The move triggered a sharp selloff in US lenders, which sank Thursday by the most in almost three years and extended losses in US premarket trading on Friday.
In the US, Thursday was the worst day for the KBW Bank Index since June 2020, as its members shed more than $90 billion of value. The biggest banks in Europe lost more than $40 billion from their market capitalizations on Friday.
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