By Brian Swint
Regional bank stocks were slightly higher early on Friday after Treasury Secretary Janet Yellen said the emergency actions used to contain the fallout from Silicon Valley Bank could be used again if needed.
The SPDR S&P Regional Banking exchange-traded fund (ticker: KRE) was up 0.3% in premarket trading Friday. Shares of $First Republic Bank(FRC-N)$ $(FRC)$ and PacWest Bancorp (PACW), which have been in focus, climbed 1.2% and 2%, respectively. Western Alliance Bank $(WAL)$ also advanced 2%.
The Fed reported that banks continue to take advantage of emergency lending. Borrowing from its discount window was $110.2 billion as of Wednesday, lower than the record $152.9 billion a week ago but still higher than usual. Banks also increased borrowing from the new Bank Term Funding Program to more than $50 billion.
Yellen said in testimony to Congress Thursday: "We have used important tools to act quickly to prevent contagion, and they are tools we could use again. The strong actions we have taken ensure that Americans' deposits are safe. Certainly, we would be prepared to take additional actions if warranted."
Yellen and Federal Reserve Chairman Jerome Powell have repeatedly asserted that consumer deposits in banks are safe, though in the week Yellen said she's not considering extending deposit insurance. Shares of regional banks, which are smaller than the biggest ones and not subject to the same regulations on capitalization, have been on a bumpy ride since the collapse of SVB and a few other midsize lenders.
Separately, Citizens Financial $(CFG)$, one of the biggest regional banks, is working on a bid for the private banking business of SVB, Reuters reported, citing unidentified people familiar with the situation. Regulators are said to want to get a deal for SVB by Monday.
Citizens Financial didn't immediately respond to a request for comment early Friday morning.
Write to Brian Swint at brian.swint@barrons.com
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March 24, 2023 05:07 ET (09:07 GMT)
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