Bank ETFs fall amid concerns over SVB and ‘crack’ in financial system after rate hikes

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Exchange-traded funds that buy bank stocks continued to slide Friday amid concerns over a run on Silicon Valley Bank.

Shares of the SPDR S&P Regional Banking ETF KRE were down 5.3% around midday Friday, while the SPDR S&P Bank ETF KBE fell 4.3% and the Invesco KBW Bank ETF KBWB fell 3.8%, according to FactSet data, at last check.Shares of the SPDR S&P Regional Banking ETF KRE were down 5.3% around midday Friday, while the SPDR S&P Bank ETF KBE fell 4.3% and the Invesco KBW Bank ETF KBWB fell 3.8%, according to FactSet data, at last check.

Shares of Silicon Valley Bank parent SVB Financial Group SIVB plunged Thursday, after the Santa Clara, Calif.-based financial-services company disclosed large losses from securities sales and a stock offering meant to provide a boost to its balance sheet. California regulators closed the bank on Friday, with the Federal Deposit Insurance Corp. named as receiver.In Jaffee’s view, the problem seen at SVB, which lends to the technology sector, is tied to the Federal Reserve’s rapid pace of interest rate hikes. The central bank’s monetary tightening works with a lag and “it’s now starting to bite,” she said.

The yield on the six-month Treasury bill TMUBMUSD06M was trading around 5.1% early afternoon Friday, FactSet data show, at last check.

 

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