US adds 311,000 jobs in February; UK economy returns to growth; regulators take over Silicon Valley Bank
UK economy has proved ‘more resilient than many expected’ says chancellor Jeremy Hunt, while problems at Silicon Valley Bank knock FTSE 100 down 2%.
Some late breaking news: US regulators have shut down Silicon Valley Bank (SVB) and taken control of its customer deposits.
It’s the largest failure of a US bank since 2008, and came after the bank failed to raise new capital today.
Officials said they shut the bank to “protect insured depositors”.
The Federal Deposit Insurance Corporation (FDIC), which typically protects deposits up to $250,000, said it had taken charge of the deposits.
As we covered through the day, trading in SVB’s shares was halted after they plunged 60% yesterday, after revealing it had lost $1.8bn on a sale of securities – forcing it to look to raise funds.
The FT says it is the second-largest bank failure in US history after the 2008 collapse of Washington Mutual.
They add:
The bank had abandoned its efforts to raise $2.25bn in new funding to cover losses on its bond portfolio earlier in the day and had been looking for a buyer to save it, according to people with knowledge of the matter.
The US economy has added more jobs than expected last month, but wage growth has cooled.
The US Non-Farm Payroll rose by 311,000 new hires last month, more than expected, but a slowdown on the blowout 504,000 recorded in January.
The unemployment rate rose to 3.6%, as more people looked for work.
But the dollar weakened, with the data showing a slowdown in wage growth. Average hourly earnings for all private workers rose 0.2% versus 0.3% in January, with annual earnings up 4.6%.
Shares of some of the world’s largest banks have fallen as fears over the future of a small California lender ripple through the markets.
Investors were spooked by news that California-based Silicon Valley Bank, which primarily lends to tech startups, had launched an emergency share sale to shore up cash after revealing it had lost $1.8bn (£1.5bn) when it sold a portfolio of bonds in response to a decline in customer deposits.
SVB’s US-listed shares plunged 60% on Thursday but the rout also spread to other Wall Street stocks. Its shares were halted on Friday after tumbling 66% in premarket trading, as CNBC reported that the SVB was in talks to sell itself after failing to raise enough capital.SVB declined to comment.
The UK’s FTSE 100 index is down 149 points, or 1.9%, in late trading at 7,730. HSBC are down 5%, with Standard Chartered off 4.6% and Barclays losing 4.4%.
