- FTSE 100 ends 66 points higher at 7,471.77
- US stocks turn mixed as Nasdaq slips
- First Citizens Bank buys most of SVB assets
4.30pm: Welcome relief for now
The FTSE 100 started the final week of March on the front foot, adding 0.9% to 7,472 by the close of trade as turmoil in the banking sector abated for the time being.
"As a new week gets underway, we’ve seen a modest easing in the banking sector angst of the last few days, with a much better tone after the sell-off at the end of last week," commented Michael Hewson, chief markets analyst at CMC Markets. "Most sectors of the markets have seen a modest rebound, helped by events on the other side of the Atlantic as reports emerge that Citizens Bank in the US is acquiring Silicon Valley Bank’s loans and deposits."
The best performers on the FTSE100 have been broad-based with some of the more defensive sectors underperforming, while cyclicals are doing better, Hewson noted.
"Despite the rebound being seen today with we’re still some way short of reversing the losses we saw on Friday, with Barclays enjoying a decent session, along with BP, which is getting a lift from gains in oil and gas prices," he added. "Retailers and consumer discretionary are also getting a lift from today’s more positive vibe, with gains from the likes of JD Sports, Primark owner Associated British Foods, and Fraser’s Group, helped in some part perhaps by today’s better-than-expected CBI retail sales numbers which showed that UK retailers were more optimistic as we head into the spring and summer months."
By the London close, US stocks were mixed. The Dow Jones Industrial Average was 0.6% up at 32,421m and the S&P 500 was 0.3% higher at 3,982. But the Nasdaq Composite had turned around to trade 0.2% down at 11,799.
3.55pm: Banking on it
A recovery in the banking sector continued to support the FTSE 100 index in late trading, with just over 30 minutes to go in London.
Craig Erlam, senior market analyst, UK & EMEA, OANDA, commented: “It's been a relatively calm start to the week, with investors seemingly relieved that the weekend brought no fresh turmoil in the banking sector.
“That was clearly the fear going into it on Friday, with Deutsche Bank being hit particularly hard amid concerns it could be next in the firing line even if the fundamentals didn't necessarily back that up.
“Anxiety is going to remain until we have a few weeks of calm and despite the small frenzy on Friday, I think we can say that the first of those is now behind us. That isn't to say that I think the storm has passed, just that the panic of the last few weeks may subside and allow for a more rational market to re-emerge. Or perhaps I'm being too hopeful for a Monday.
Erlam added: “The authorities were once again hard at work over the weekend trying to clean up the mess of the last few weeks. This weekend it was a large portion of SVB that was sold to First Citizens Bank, with the FDIC retaining the remaining securities and other assets.
“The important thing is that the various institutions in the US and Europe continue to display the ability to rapidly and decisively deal with the fallout from the recent turbulence and contain it before it worsens. That includes regaining the confidence of the markets which has been shaken.
“While nerves are evident, there's no doubt that the response so far has prevented the situation from becoming much worse and confidence will gradually improve as long as no other banks fall into difficulties. That's obviously a big ‘if’ at this point.”
3.35pm: Life's a gas
Energy security minister Grant Shapps has said the UK government will release plans this week to decouple the price of electricity from gas after the latter has caused bills to skyrocket.
“On Thursday, we will … commit to addressing the imbalance between gas and electricity costs in household bills, to make electricity cheaper for the long term,” he wrote in the Sun.
Shapps claimed addressing “distortions” in the market, caused by gas being used as a benchmark for other prices, could save households up to £100 a year in bills.
This could be done by reducing policy costs on electricity bills, which are around £165 under Ofgem’s April price cap that limits suppliers to charging £3,280 on an annual basis.
The plans will come as part of the government's ‘Green Day,’ where it is expected to unveil a host of measures to bolster the UK’s energy security.
Citigroup analysts predict the government may take a new stance on North Sea oil and gas producers by introducing a level where the current 35% windfall tax “ceases to apply”.
3.10pm: It's good to TalkTalk
Telecoms and broadband provider TalkTalk is in the early stages of a process to sell its Business Direct unit, which serves more than 80,000 small business and corporate customers, according to a Sky News report.
TalkTalk Business Direct is among the leading independent providers of data connectivity to the business market and any sale would include a long-term wholesale agreement providing preferential access to the TalkTalk network, the report said, citing insiders.
The division being earmarked for sale by TalkTalk, which is now privately owned, recorded annual revenue of over £85mln and earnings before interest, tax, depreciation and amortisation of more than £17mln, Sky News added.
Last year, Sky News revealed that TalkTalk was in the crosshairs of telecoms industry rivals including Vodafone and Virgin Media O2 about a takeover of the whole group.
The company, which was founded by Carphone Warehouse entrepreneur Sir Charles Dunstone, comprises three divisions, the B2B operation, a direct consumer unit with 2.5 million customers. and a wholesale platform which also has additional non-TalkTalk business and residential customers.
The privately-owned company was acquired by Toscafund Asset Management in March 2021.
2.50pm: Wall Street wanted
The FTSE 100 index held near session highs as US stocks moved forward at the open as fears over the health of the banking sector abated after news that First Citizens Bank would be acquiring Silicon Valley Bank.
Around 20 minutes after the New York market open, the Dow Jones Industrial Average was up 258 points, or 0.8%, at 32,495, while the S&P 500 index was up 0.7%, and the Nasdaq Composite added 0.5%.
Reports that lawmakers are considering expanding a lending facility to boost balance sheets also sent US regional bank stocks sharply higher, with First Republic Bank up 28.8%, Western Alliance Bancorporation up 7.2%, and PacWest Bancorp up 7.4% at the open.
FOREX.com market analyst Fiona Cincotta said volatility is expected to be elevated again this week as investors continue watching and weighing up developments in the banking sector.
“Fed speakers will also be under the spotlight after the Fed hiked rates by 25 bps last week, but the market is questioning the Fed’s ability to hike further amid the stresses in the financial sector,” Cincott said. “Fed speakers will shed more light on how policymakers are balancing the banking sector crisis against high inflation and the need to hike rates.”
2.25pm: Branches being chopped
Banks may be leading the market rally on Monday, but all is still not completely rosy for users of higher street lenders.
Continuing a trend, Barclays has revealed plans to shut 14 more branches across England and Wales in June.
These closures will be in addition to the 55 branches the bank already planned to shut this year, meaning at least 69 Barclays branches will shut in 2023.
The decision from Barclays follows that of other major banks, which have axed branches as more people move to online banking. Lloyds, Barclays, NatWest, HSBC and Santander have all shut more than half of their branches since 2015.
Figures from 2021 show there were just 8,810 banks in cities, towns and villages across the UK in 2012 - down from 13,300 in 2012 and 20,583 in 1988.
2.10pm: Energy villains
Energy providers British Gas, Scottish Power and OVO energy are revealed to have been the worst perpetrators of installing prepayment meters in 2022, government figures revealed.
Prepayment meters, a pay-as-you-go service for utility bills, were banned from being installed after it was found British Gas had been breaking into vulnerable households to install the devices.
Throughout 2022, more than 94,000 prepayment meters were installed under warrant, the government data highlighted.
British Gas contributed to 25,000 of these installations, followed closely by Iberdrola-owned Scottish Power which installed 24,300 – the worst offender considering its smaller customer base.
1.30pm: A look at some of today’s movers in London
Risers
Equals - up 11% to 90 Payments company rallied after swinging to a full-year post-tax profit. The AIM-listed company focused on the small and medium-sized marketplace reported profits of £3.6mln to the year-end 31 December 2022 compared to a loss of £2.3mln for 12 months prior.
AIQ - up 42% to 7.8p Shares shot up on Monday as the company announced a new contract for a virtual datacentre. The contract, worth US$458,600, was a boon for the micro-cap firm which will project manage and subcontract the technical delivery. The project is expected to be delivered over the span of seven months, with payments being made in tranches.
Fallers
Scotgold - down 67% to 12p Scotgold’s stock crumbled as the miner said gold grades had been lower than expected and it issued a ‘going concern’ warning alongside plans to raise US$500,000. Going concern is an accounting term that refers to a business’s ability to meet its future financial obligations.
Gulf Keystone - down 16% to 144p Shares fell around 16% in Monday’s early deals as it reported to investors that the main export route out of the Kurdistan region of northern Iraq, the Iraq-Turkey pipeline, has been shut-in.
1.00pm: Wall Street seen higher
Wall Street is expected to open higher as pressure on US regional banks abates, with news that failed Silicon Valley Bank (SVB) is to be acquired by North Carolina-based lender First Citizens Bank helping to improve sentiment in the markets.
Futures for the S&P 500 index rose more than 0.5% in Monday pre-market trading, while those for the Dow Jones Industrial Average (DJIA) gained just under 0.5%, and contracts for the Nasdaq-100 added 0.3%.
Regulators confirmed early Monday that First Citizens will acquire the deposits and loans of SVB just more than two weeks after the bank's demise sparked a crisis of confidence in global financial markets.
Under the deal with the Federal Deposit Insurance Corporation (FDIC), First Citizens will assume assets of $110 billion, deposits of $56 billion and loans of $72 billion as per a loss-sharing agreement that will provide downside protection against possible credit losses.
After a turbulent week of trading, the S&P 500 closed up 0.6% at 3,971 points on Friday, while the DJIA added 0.4% to 32,238 and the Nasdaq Composite gained 0.3 % to 11,824.
“Futures are indicating the week will start on a marginally positive note for Wall Street, with major indices currently eyeing some gains at the opening bell,” commented James Hughes, chief market analyst at Scope Markets.
“General sentiment appears to be improving with the news that draws on regional banks are abating somewhat and also with an update on the sale process of SVB. The turmoil that gripped European banks heading into the weekend is also abating – at least for now – but it would be of little surprise if traders were to cling onto a cautious mindset for some time yet.
With economic data thin on the ground over the next few days, investors will be looking to the revised estimate for US fourth-quarter GDP, due for release on Thursday, which should confirm growth of 2.7% in the final quarter of 2022, TickMill Group market analyst Patrick Munnelly noted.
“The main event outside of banking news flow this week will be the Fed’s preferred inflation gauge, the PCE (personal consumption expenditures) deflator due for release on Friday,” Munnelly said.
“Once again investors will be parsing the data for signals that the recent disinflationary signs were driven by the unusual weather witnessed at the beginning of the year or will the number confirm that further work from the Fed will be required to tackle persistent inflation pressures.”
“Markets are expecting the headline PCE deflator to fall to 5.2% in February from 5.4% in January, while the core figure excluding energy and food prices is expected to show an uptick of 0.5% leaving the annualised number at 4.8%,” he added. “If confirmed this will leave officials with the conundrum of battling inflation while at the same time walking the fine line of maintaining market stability amidst the landscape of banking sector fragility.”
An hour and a half ahead of the US open, the FTSE 100 is up 66 points.
12.48pm: Asda owners hoping to complete merger with forecourt business in April
The billionaire owners of Asda are racing to complete a blockbuster merger of the supermarket chain and their UK petrol stations as part of efforts to cut their forecourts empire’s debt burden.
The Issa brothers and their private equity backers at TDR Capital, who jointly own both businesses, aim to combine Asda and EG Group’s UK division by the end of April.
The deal, said to be worth £12 billion, would probably be structured as a takeover of EG UK by Asda and result in more debt being heaped onto the supermarket’s balance sheet. Asda’s net debt already stands at £4.7 billion.
Talks over a combination of Asda and EG Group in the UK were revealed by The Sunday Times in January. Now, the plan is being put into action at a rapid pace.
The deal would create a sprawling group with 581 supermarkets, 700 petrol forecourts and more than 100 convenience stores. “Obviously, they think it’s a good idea to put the businesses together, but it’s a matter of getting it done,” a City source said.
12.20pm: US heading to recession - survey
The US will likely enter a recession this year and face high inflation well into 2024, a majority of economists predicted in their response to a semiannual survey.
More than two-thirds of respondents to the National Association for Business Economics Policy Survey also see inflation remaining above 4% at the end of this year.
The survey summarized the responses of 217 NABE members, and was conducted between March 2 and March 10, the organization said in a statement.
The US Federal Reserve has raised rates 4.75 percentage points in a bid to tackle rising inflation, which reached its highest level in decades last year.
Price rises slowed slightly to an annual level of 6.0% in February, which is well above the Fed's long-term target of 2%.
Amid the gloomy economic forecast, there was also some good news, with just five percent of respondents believing the US is currently in the midst of a recession, "far fewer" than the 19% in its previous economic survey, NABE President Julia Coronado said in a statement.
Economists also slightly raised the chances of the Fed achieving a so-called "soft landing" – bringing down inflation while avoiding a recession – from 27% in August to 30% in March this year.
11.55am: CVC also interested in parts of Cineworld - Sky
Sky News has reported that CVC Capital Partners is also interested in buying parts of Cineworld.
A report said that CVC is in talks with Cineworld and its advisers about an offer for its operations in eastern Europe and Israel.
This would leave CVC vying with Elliott Management, the prominent activist investor, to acquire the assets, (see 8.35am update) months after the cinema chain filed for Chapter 11 bankruptcy protection in the US.
Cineworld shares remain firmer, up 6.2%, while the FTSE 100 has pushed higher, now up 70 points.
11.32am: Retailers more optimistic - CBI
The CBI’s monthly gauge of the retail sector shows that retailers have the first positive sales expectations since last September.
Its expected sales balance increased to +9 for April, up from -18 in March which brings to an end a run of negative sales expectations since last October.
Retail sales volumes were broadly unchanged in the year to March, according to the latest CBI #DTS. Retailers expect sales to grow at a moderate pace next month pic.twitter.com/g1Fof7ajw3
— CBI Economics (@CBI_Economics) March 27, 2023
Sales in March were reported little changed at +1, similar to February’s reading of +2, as the cost of living squeeze continues to hit consumer spending.
CBI principal economist Martin Sartorius said it is “encouraging” that activity in the retail sector seems to be stabilising, after “a challenging winter.”
“This resilience has helped inspire some spring shoots of optimism, with firms expecting an increase in sales for the first time since last September,” he added.
11.10am: Business still struggling to find staff
Most British businesses are struggling to plug gaps in their workforces amid a shortage of skilled talent.
About 80% of companies reported difficulty filling jobs, according to the latest talent shortage survey by recruitment firm, ManpowerGroup, the highest percentage since 2006, while the proportion of businesses reporting difficulties with recruitment has jumped from 13% a decade ago.
The pandemic has exacerbated the nation’s skills shortages, the survey showed; only 35% of businesses reported concerns about staffing in 2019.
Although the number of job vacancies in the UK has been coming down in recent months, there are still more than 1.1mln unfilled jobs across the country, 40% more than at the beginning of 2020.
“Talent shortages are always an area of concern for employers, but the real step change in our data can be seen post 2019,” Michael Stull, director at ManpowerGroup UK, said.
He added that employers were “acutely aware of the growing scarcity of key skills, so they’re holding on to and trying to stockpile business-critical talent.
10.35am: First Republic shares soar in pre-market trading
Shares in First Republic have jumped nearly 25% in pre-market trading, after a report that an emergency lending facility for US banks could be expanded.
Earlier this month, a number of major Wall Street banks pledged to put US$30bn of deposits into First Republic, but that failed to stem concerns over the bank.
But Bloomberg has reported that “officials have yet to decide on what support they could provide First Republic, if any, and an expansion of the Federal Reserve’s offering is one of several options being weighed at this early stage.”
The move could give First Republic more time to bolster its health https://t.co/kM2xEb5dGg
— Bloomberg (@business) March 26, 2023
“Regulators continue to grapple with two other failed lenders — Silicon Valley Bank and Signature Bank — that require more immediate attention.”
“Even short of that step, watchdogs see First Republic as stable enough to operate without any immediate intervention as the company and its advisers try to work out a deal to shore up its balance sheet, the people said, asking not to be named discussing confidential talks.”
9.55am: HSBC investor forces vote on break-up
HSBC has been forced to give its shareholders a vote on a proposal by Hong Kong investors to require the bank to conduct a strategic overhaul, including a spin-off of the Asian business.
The vote was requested by Ken Lui, an investor who runs a group campaigning for a spin-off of the Asian arm.
The bank’s shareholders will also vote on another resolution he has tabled, calling for the bank to increase its dividends back to pre-Covid levels.
The Asian-focused lender has faced a year-long campaign, sparked by intervention from its largest shareholder, the Chinese insurer Ping An, to break off its Asian operations from the rest of the business, which employs more than 200,000 people in 64 countries.
It is not clear whether the Chinese insurer will use its 9% holding to back Lui, who has said that he had “not engaged with Ping An at all”.
In the notice to shareholders ahead of its AGM on 5 May, first reported by the Sunday Times, the board recommended that investors vote against an Asian spin-off, saying it had already considered “strategic reorganisation, and restructuring of the company’s Asia businesses” in 2022.
“The board concluded that all of these structural reforms would significantly dilute the economics of our international business model upon which our strategy is based,” it said. “This would result not only in a material loss of value for shareholders but also lower dividends.”
HSBC shares are now little changed after opening higher, up 0.1%. The FTSE 100 is up 39 points.
9.31am: Business confidence improves in Germany - Ifo
Business confidence in Germany rose unexpectedly in March according to figures from the Ifo institute.
The closely watched business climate index improved to 93.3 in March following a reading of 91.1 in February and above consensus expectations for a slight fall to 91.0.
Analysts at ING Economics noted “Lower wholesale gas prices and the reopening of the Chinese economy have boosted economic confidence,” with both “the current assessment and expectations component increased significantly.”
But they fear “that the latest financial turmoil will reach the real economy in the coming months.”
ING pointed out “the Ifo index can react with a delay of one to two months to unexpected events and financial market turmoil can clearly affect the real economy over time.”
“The German economy will continue its flirtation with recession,” ING forecast.
“But what is more important: the ongoing war in Ukraine, ongoing structural changes, an ongoing energy transition and the impact of the most aggressive monetary policy tightening in decades are the main drivers of what looks like subdued growth for a longer while.”
Back in London and the FTSE seems to have settled for now, around 44 points to the good.
9.00am: FTSE 100 rally in danger of fizzling out
The early morning rally is in danger of fizzling out. At 9.00am London's lead index was at 7,437.52, up 32.07 points, or 0.43% after earlier marching as high as 7,485.
The acquisition of the majority of SVB’s assets First Citizens Bank has calmed some jitters in the banking sector but nervousness remains.
In London, banks are broadly firmer although a touch of opening highs. Barclays is up 1.3%, Lloyds up 0.8% and NatWest up 0.1%.
In Europe, the mood is also positive with the Cac 40 up 0.6% and the Dax gaining 0.7%. The Eurostoxx Banks Index is 0.7% higher.
Deutsche Bank, which was at the centre of Friday’s turmoil, recovered 2.3% while Commerzbank is 1.3% higher. In Paris, BNP Paribas has risen 0.5% but Societe Generale has slipped 0.2%.
Susannah Streeter, head of money and markets, Hargreaves Lansdown said: “With Silicon Valley Bank’s deposits and loans now housed in longer term accommodation in the US, a calm of sorts has descended on the banking sector but hopes that this move will see significant stability return may be short-lived.”
She noted the fears is that banks are “sitting on big piles of unrealised losses, not just in their bond portfolios, but on other assets which have been battered by the storm of high interest rates.”
“It’s feared that the commercial real estate sector could be the next weakest link as debt matures over the next few years and will need to be refinanced in a market where rates have soared, while valuations have fallen, and there is a lot less money sloshing around.”
Analysts at JPMorgan Chase remain negative on the banking sector.
“We continue to remain cautious with ongoing concerns around the impact of higher rates combined with quantitative tightening on a 16x leveraged sector, particularly around potential liquidity issues for banks,” they said.
“The banking sector, especially in Europe, has over-earned on liability margins as customer deposits and wholesale funding remained cheap.”
“Now, the repricing of liabilities means that the NII story is quickly nearing its end,” analysts at JPM said.
8.45am: Saudi National Bank chair resigns
The chair of Saudi National Bank, Ammar Alkhudairy, has resigned for personal reasons after the kingdom’s largest lender was thrust into the limelight amid the tumult at Credit Suisse.
The chief executive, Saeed Al Ghamdi, will replace Alkhudairy as chair, the bank said on Monday. Talal Al Khereiji becomes acting chief executive.
Earlier this month, Alkhudairy said in a TV interview that SNB, which bought a stake just under 10% in Credit Suisse last year, would not provide any more financial assistance. He said purchasing more shares would have pushed SNB’s stake above 10% and caused a “regulatory issue”.
His comments sent Credit Suisse’s share price into a tailspin, eventually leading to its rescue by Swiss rival UBS.
8.35am: Cineworld rises on reports of interest in eastern European and Israeli assets
Cineworld has pushed 6.4% higher so far on Monday. Over the weekend Sky News reported that US activist investment firm Elliott Management is planning to take over beleaguered cinema chain Cineworld Group PLC (LSE:CINE)'s operations outside of the UK and the US.
Citing "insiders", Sky News said that Elliott has tabled a bid for the Brentford, London-based firm's operations in eastern Europe and Israel.
Elliott had also explored a bid for the whole of Cineworld, but its most recent proposal excludes its UK and US operations, Sky said.
Exclusive: The feared activist investor Elliott Management is plotting a takeover of large chunks of the ailing London-listed cinema operator Cineworld; Elliott is bidding for the group’s assets in Eastern Europe and Israel, but not in the UK or US. https://t.co/pJXvUvel57
— Mark Kleinman (@MarkKleinmanSky) March 25, 2023
A month ago, Cineworld said it has received non-binding proposals from a number of counterparties for some or all of its businesses, but the debt-ridden business expects any deal with its creditors will wipe out its shareholders.
"None of these proposals involves an all-cash bid for the entire business," the beleaguered cinema chain had confirmed.
8.15am: Footsie rallies as banking stocks recover
The FTSE 100 regained its poise on Monday as relative calm returned to the banking sector following a volatile trading session on Friday.
At 8.15am London's lead index was up 60.98 points, or 0.8%, at 7,466.43 while the FTSE 250 jumped to 18,632.01, up 138.18 points, or 0.75%.
Banks led the recovery with Barclays up 3.1%, Standard Chartered rising 2%, Lloyds Banking Group PLC (LSE:LLOY) advancing 1.8% and HSBC Holdings firming 1.3%.
Deutsche Bank strategists stated "obviously matters in the banking sector will continue to set the pace this week."
They pointed out that, ”In an age of social media, misinformation can spread like wildfire so you're never sure where the next incredulous story is going to come from alongside the genuine issues.”
“Investors in financials have had their confidence knocked by recent events which has allowed those betting against the sector a free run,” they added.
But they also highlighted: “If anything some rampant misinformation and fear on Friday morning allowed for an examination of the facts and fundamentals of the large banks and buyers stepped back in with European banks well off the lows by the end of Friday's session with the US bank index turning positive (+0.42%) just before the US close.”
In other news in the banking sector First Citizens Bank is buying "all the deposits and loans" of Silicon Valley Bank, after it went bankrupt at the beginning of March, the Federal Deposit Insurance Corporation said.
The transaction covers US$119bn in deposits and US$72bn in assets.
“The 17 former branches of Silicon Valley Bridge Bank, National Association, will open as First–Citizens Bank & Trust Company on Monday, March 27, 2023.,” the US banking agency said in a statement.
Shares in AstraZeneca PLC (LSE:AZN) rose 1.3% after it announced positive high-level results from its Neuro-TTRansform phase III trial for eplontersen.
The trial explored the treatment for use in hereditary transthyretin-mediated amyloid polyneuropathy.
"At 66 weeks, patients treated with eplontersen continued to demonstrate a statistically significant and clinically meaningful change from baseline versus an external placebo group," Astra said.
Eplontersen is an investigational medicine, which targets the reduction the production of transthyretin protein.
7.36am: First Citizens Bank to buy US$72bn of SVB assets
The future of Silicon Valley Bank, has been resolved, at least for now. The bank which collapsed sparking the ongoing nerves in the financial sector has been sold.
First Citizens Bank will buy "all the deposits and loans" of Silicon Valley Bank, after it went bankrupt at the beginning of March, the Federal Deposit Insurance Corporation said.
The transaction covers US$119bn in deposits and US$72bn in assets.
“The 17 former branches of Silicon Valley Bridge Bank, National Association, will open as First–Citizens Bank & Trust Company on Monday, March 27, 2023.,” the US banking agency said in a statement.
Depositors of SVB will "automatically become depositors of First Citizens Bank", added the FDIC, which will continue to insure deposits.
SVB, the US' 16th biggest bank by assets and a key lender to startups in the country since the 1980s, collapsed after a sudden run on deposits, prompting regulators to seize control.
Along with the FDIC, the US Treasury and Federal Reserve had set out plans to ensure SVB customers would be able to access their deposits, while the Fed introduced a new lending tool for banks in an effort to prevent a repeat of SVB's quick demise.
The FDIC estimates the cost of the failure of Silicon Valley Bank to its Deposit Insurance Fund to be approximately US$20bn. The exact cost will be determined when the FDIC terminates the receivership.
7.00am: FTSE set for a bright start
The FTSE 100 is expected to make solid progress at the open on Monday after European and US officials attempted to calm renewed jitters in the banking sector.
Spread betting companies are calling London’s lead index up by around 58 points.
On Friday, spikes in credit default swaps prices caused sharp falls in the price of Deutsche Bank In particular but the German Chancellor, president of the ECB and the US Treasury Secretary all spoke to reinforce the strength of the banking sector.
This calmed nerves in the US where markets closed higher with the Dow Jones Industrial Average up 0.4%, the S&P 500 up 0.6% and the Nasdaq Composite up 0.3%.
In Asia on Monday, stocks were mixed. The Nikkei 225 index in Tokyo was up 0.5%. In China, the Shanghai Composite was down 0.7%, while the Hang Seng index in Hong Kong was down 0.7%.
Monday's economic calendar has the Ifo German business climate index while Bank of England Governor Andrew Bailey is due to speak after the market close. The early focus will be a trading statement from cruise ship operator Carnival.