Wall Street bank stocks rebound as Treasury Secretary Janet Yellen vows to support US lenders
Wall Street banking shares bounced back yesterday as Treasury Secretary Janet Yellen signaled the US government was ready to bail out depositors at more smaller lenders if necessary.
Yellen told an industry conference that further action “may be warranted” if another banking meltdown threatens the banking system.
Shares of San Francisco-based lender First Republic rose more than 32 percent after collapsing in recent days over financial health fears.
Support: Treasury Secretary Janet Yellen told an industry conference that further action “may be warranted” if another bank collapse threatens the banking system
The recovery came amid reports that JP Morgan boss Jamie Dimon was leading talks with other major banks to invest in First Republic.
Fears for regional banks in America have been at the forefront in recent weeks due to the fallout from the collapse of California’s Silicon Valley Bank (SVB) and Signature Bank.
In Europe, the crisis took its toll on Credit Suisse, which was swallowed up in a £2.6bn bailout by Swiss rival UBS.
The US government has already helped stabilize the US banking system, guaranteeing billions of dollars in deposits at SVB and Signature.
In her remarks yesterday — which received a standing ovation from delegates at the American Bankers Association conference in Washington — Yellen indicated more help could be on the way.
She said that “the situation is generally stabilizing” and that “the US banking system remains healthy.”