That message was broadcast clearly by both Treasury Secretary Janet Yellen over the weekend, and by President Joe Biden on Monday. Though depositors have been made whole in both recent failures, banks and their shareholders should be prepared for the government to let them fail, and should not count on anything resembling a 2008-style bailout. PacWest trades were halted 11 times, and First Republic was halted 13 times in that timeframe. Trading in shares of Western Alliance were halted 20 times since March 10 due to spikes in volatility, according to NYSE data. Investors are clearly nervous about the potential for a cascade of bank failures, reflected in the stock price of a handful of regional banks on Monday.įirst Republic, PacWest, Western Alliance, and Charles Schwab are among the major names that cratered on Monday morning as investors grow anxious about banks' ties to the tech industry or which may be sitting on large unrealized losses in their bond portfolios, two factors that catalyzed the fall of SVB. How many more? I don't know," Issac said, comparing the situation to the banking crises of the 1980s and 1990s, when the FDIC dealt with the failure of over 1,600 banks.įor further clues that there's more pain to come, look to the market. "There's no doubt in my mind: There's going to be more. In an interview with Politico on Sunday, former Federal Deposit Insurance Corporation chairman William Issac said more banks are bound to collapse, and markets could be on the precipice of another 1980s-style banking crisis.
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