SINGAPORE, March 13 (Reuters) - Shares of banks in Asia
slumped on Monday after the collapse of a U.S. startup-focused
bank sparked a global flight to quality on fears of broader
systemic risk, even as authorities tried to stem the contagion
with steps to placate depositors.
The U.S. administration stepped in on Sunday with a series
of emergency measures to shore up confidence in the banking
system following the failure of Silicon Valley Bank (SVB) , which marked the biggest U.S. bank failure since the
2008 financial crisis.
After a dramatic weekend, U.S. regulators said the bank's
customers will have access to all their deposits starting Monday
and set up a new facility to give banks access to emergency
funds.
The Federal Reserve also made it easier for banks to borrow
from it in emergencies.
While U.S. stock futures and tech shares rose in Asia trade
on the back of the news, banks in the region were unable to
shake concerns about systemic risk and tracked losses in their
Wall Street counterparts from the Friday session.
In Hong Kong, shares of HSBC Holdings opened
roughly 1.7% lower at a two-month trough while Standard
Chartered Bank shares fell nearly 1% to a one-month
low.
U.S. banks lost over $100 billion in stock market value late
last week following the collapse, while European banks lost
around another $50 billion in value, according to a Reuters
calculation.
"The Fed are not only addressing concerns over the bank's
asset side of the balance sheet but on the liability side, where
they are essentially stepping in front of a larger bank run,
which...can be devastatingly swift to bring down any
institution," said Chris Weston, head of research at
Pepperstone.
"There's likely going to be further migrations to the
stronger banks and those with a large asset base and low equity
will continue to see depositors divest capital."
SVB's collapse comes alongside the closure of crypto-focused
bank Silvergate , which last week disclosed plans to wind
down operations and voluntarily liquidate, in the aftermath of
FTX's implosion last year.
U.S. state regulators on Sunday also closed New York-based
Signature Bank , which became the next casualty of the
banking turmoil after SVB.
Elsewhere in Asia, Japan's Topix was last 2% lower,
dragged heavily by financial stocks.
Mitsubishi UFJ slid nearly 4% to a one-month low of
896.3 yen, while Sumitomo Mitsui Financial Group tumbled almost 5%. The broader Topix Banks Index was
last 4.75% lower as of the midday break.
Shares of Singapore's largest bank DBS slid to
their lowest since late October last year, at S$32.71 ($24.32),
while OCBC's shares lost close to 1.5%.
($1 = 1.3449 Singapore dollars)
(Reporting by Rae Wee; Editing by Sam Holmes)
