Panic in the market after the banking meltdown means it will get tougher to buy a home

Fitch Ratings warned investors that Western Alliance, a regional bank caught up in the SVB fallout, could get downgraded.

Western Alliance has cash reserves of $25 billion, equivalent to approximately 47% of total deposits, Fitch noted. The bank has said withdrawals have been “moderate” since the SVB failure, and insured deposits make up more than half of total deposits. That, and the Fed’s new lending facility, are positive signs, Fitch said. But stress in the marketplace continues to threaten the company’s liquidity.

Shares of Western Alliance tumbled 11% in premarket trading Thursday.

The credit rating agency is the latest to downgrade or threaten a downgrade of a regional bank’s credit. Fitch and S&P Global Ratings downgraded First Republic Bank’s credit rating Wednesday on concerns that depositors could pull their cash despite federal intervention to restore faith in the banking sector.

Moody’s Investors Service on Tuesday cut its outlook for the entire US banking sector and placed six US banks on review for potential credit rating downgrades, including Western Alliance.

Federal regulators are stepping up their oversight of the banking industry following the stunning collapse of Silicon Valley Bank.

The OCC did not detail what that intensified monitoring looks like. 

The increased oversight comes as regulators face questions about how they missed red flags about Silicon Valley Bank before it became the second-biggest bank failure in US history. 

The Federal Reserve has launched a review of the regulation and oversight of the California lender, with Fed Chair Jerome Powell calling for a “transparent and swift” examination of what happened.

“The OCC remains committed to ensuring that national banks remain safe and sound, provide fair access to financial services and treat customers fairly,” the OCC spokesperson said. 

Treasury Secretary Janet Yellen says US officials have taken “decisive and forceful” actions to bolster confidence in the banking system and stressed that Americans’ bank deposits are safe.

“Our banking system remains sound,” Yellen said in prepared remarks to be delivered on Thursday during a hearing before the Senate Finance Committee.

“Americans can feel confident that their deposits will be there when they need them,” Yellen said. “This week’s actions demonstrate our resolute commitment to ensure that depositors’ savings remain safe.”

The Treasury Department, Federal Reserve and FDIC took extraordinary steps on Sunday, promising that the uninsured depositors at Silicon Valley Bank and Signature Bank will be made whole after those lenders failed.

“On Monday morning, customers were able to access all of the money in their deposit accounts so they could make payroll and pay the bills,” Yellen said.

Yellen pointed out that shareholders and debtholders of the banks are not being protected by the government and no taxpayer money is being used or put at risk.

Beyond the banking crisis, Yellen touted historically low unemployment and booming business creation.

“We have seen some moderation in headline inflation, but more work needs to be done,” Yellen said. 

Growing stress in the banking sector has boosted the odds of a recession within the next 12 months, Goldman Sachs said in a note to investors Wednesday.

Goldman now believes that America’s economy has a 35% chance of entering a recession within a year, up from 25% before the banking sector meltdown started a week ago.

But the near-term prospects for the US economy remain strong. Goldman’s business survey trackers indicate the economy grew slightly in February, and sales are expected to increase 3% across industries during the current quarter.

Jobs remain plentiful and although the layoff rate has ticked slightly higher, Goldman said it remains historically low. Wage growth is slowing as the Federal Reserve continues to hike rates to cool off the economy, but paychecks are still getting larger — and inflation isn’t close to normal, Goldman said.

The Swiss National Bank (SNB) bank has confirmed that it will provide liquidity to Credit Suisse, as requested.

The Zurich-based lender had asked the central bank for a $53 billion loan after its shares plunged more than 24% on Wednesday.

Confirming that the liquidity will be provided “against sufficient collateral,” the Swiss central bank said, “within the framework of its statutory mandate, the SNB (Swiss National Bank) may provide liquidity to a domestic bank against collateral.”

Brent crude oil prices ticked up 1% Thursday to hit $74 a barrel as markets cheered an announcement by Credit Suisse that it would accept a 50 billion Swiss Franc ($53.7 billion) loan from Switzerland’s central bank “to pre-emptively strengthen its liquidity.”

But compared with last Friday, Europe’s benchmark oil price is still down 10%.

Investors have been on edge over whether the collapse of Silicon Valley Bank in the United States could spark a banking crisis that would hurt the global economy.

West Texas Intermediate crude, the reference point for US oil prices, rose 0.8% in pre-market trade.

Credit Suisse raised alarm bells after revealing it needs a lifeline to stay afloat — one it has now accepted from the Swiss central bank.

But the Zurich-based lender’s struggles sent global markets into a tizzy on Wednesday after acknowledging “material weakness” in its financial reporting, scrapping bonuses for top executives and being denied further investment from its biggest shareholder, the Saudi National Bank.

Here’s what you need to know

New deal: Credit Suisse agreed to borrow more than $50 billion from Swiss National Bank after its shares plunged as much as 30% Wednesday in its biggest one-day drop ever. The crash came a month after a historic loss for the bank, and spilled over into other European banking shares, with French and German lenders such as BNP Paribas, Societe Generale, Commerzbank and Deutsche Bank falling Wednesday. Italian, UK and US banks also slumped.

Chinese bank stocks advanced but other Asian stocks sank: Troubles at Credit Suisse are reigniting concerns about even some of the world’s biggest financiers, which comes just days after the collapse of Silicon Valley Bank. So here’s how markets are doing today:

Credit Suisse shares also surged: In the opening minutes of trading, Switzerland’s second-largest bank’s stock was up more than 30%. On Wednesday the bank plunged more than 24% to a record low after its biggest shareholder said it had no plans to give any more funds to Credit Suisse.

The banking meltdown over the past week has left us with more questions than answers. The stunning collapse of two American banks and the loss of investor confidence in Credit Suisse led to wild market swings and put Wall Street on edge.

During CNN’s primetime special, “Bank Bust: Inside the Collapse of SVB,” experts weighed in on how to best understand what’s happening in a rapidly developing and confusing environment for financial institutions.

With all the panic in the market, it gets tougher to purchase a home, particularly if government regulators like the Federal Reserve crack down on banks in the wake of SVB’s collapse. The Fed has also been on a historic rate-hiking regime to keep inflation in check, and most economists expect that to continue.

“On top of that, I think a lot of folks are feeling very concerned about, ‘Hey, if I’m saving up for a down payment, is a bank a safe place to put that money?’”

The 30-year fixed-rate mortgage averaged 6.73% in the week ending March 9. A year ago, it was 3.85%.

Freddie Mac is set to release its average weekly mortgage rates at 12 p.m. ET on Thursday.

Shares in Credit Suisse have surged in the opening minutes of trading after it agreed a $53 billion loan from the Swiss central bank.

Switzerland’s second largest bank was up more than 30% in early trade.

On Wednesday the bank plunged more than 24% to a record low after its biggest shareholder said it had no plans to give any more funds to Credit Suisse.

Overnight the Swiss central bank and the Swiss regulator said they were ready to provide financial support to Credit Suisse, and the bank took up the offer, saying the loan was a “decisive action to pre-emptively strengthen its liquidity.”