Was The FDIC Statement On SVB Too Vague To Stop Contagion? First Republic Stock Cratered Today

UPDATE, March 13, 11:45 a.m. — The Joint Statement by Treasury, Federal Reserve, and FDIC may be having a positive effect. While regional bank stocks have been tanking, large banks are not suffering so much at this time as are major stock indices.

We’re close to the close, so we will revisit.

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Trading in shares of regional bank First Republic were halted early this morning (March 13) after the price plummeted a record 67%. This even after the bank said it had strengthened its financial position, and after the Joint Statement by Treasury, Federal Reserve, and FDIC

Live Quote and more: First Republic drops 60%, leads decline in bank stocks despite government’s backstop of SVB.

Were The Feds Too Vague?

Yesterday (March 13), I took heat from a prominent wine industry executive because I stated in a Facebook post that theTreasury/Fed/FDIC statement  was too little, too vague, and would not do much to quell contagion.

 

My point was that their statement left room for doubt, and that opening was all it took for investors to stay worried. This was exacerbated by the failure of Sunday’s auction to find a buyer.