matt egan, thank you for the update. let's get perspective.s to share his reporting is the wall street jury room's chief economics correspondent nick timer. grateful for your time today. let's start with yesterday there was stability in the financial market. a lot of people thought this is going to be contained. today you have the credit suisse development. is this a case where there are five or six banks that are a little wobbly and we need to get through that question? or is this a case of confidence is dropping and we have a long-term problem? >> it could be both. we don't know the answer to that question yet. it's an important question. people are asking why the government acted on sunday to basically bail out the uninsured deposit issers of these two banks. i think we're seeing right now why they did act that way. the concern on sunday was that if you make people who have large uninsured deposits, that includes companies that are making payroll, if it they are worried about those deposit ises, this was a bank a week ago there were some pr

i want to bring in cnn's matt egan. matt, this has been a roller coaster for the u.s. economy.hat does rebound for regional banks mean? >> well, jake, this is one sign that confidence maybe starting to return. that perhaps cooler heads are prevailing. this collapse of silicon valley bank was driven by psychology, emotion, panic, specifically. and then we saw regional bank stocks collapse yesterday, despite the fact that the federal government launched the uninsured investors over the weekend. it is likely to see, as you see on the screen, regional banks closing sharply higher. although i would note that some of these gains lost as the day went on. more surprising is what's actually happened with go and telling phil mattingly, deposit flows have eked. that is what officials want to see. they want to stop the panic before it spreads elsewhere. they want to restore confidence. of course, jake, that's not going to happen overnight. confidence is a fragile thing and it was clearly shaken over the last few days. >> we know that the justice department is investigating the collapse of

lee and matt egan, thank you. and to dig deeper is bert who is covering the startups and this is really your area of the startups for many of the firms here. and first based on what you are seeing here, watching the markets closely as you do, but also speaking to the folks in the sector here, and does it look like the steps taken so far by the administration, and the fed and the treasury department will keep this from going more broadly. >> yes. there was a collective sigh of relief of the investors and the startup founder who were concerned to make a payroll or whether they would be able to at least be able to say that. >> ben, you have an important piece of how important this bank is over the next 40 years, but the concerns bubbling at the end of last year, and if that points to the signs that have been there, could this have been avoided? >> it sure seems like it, and seems easy to say now in retrospect, that it would be a bad idea for bank to put tens of billions of dollars in 10-year treasuries that they woul

matt egan thank you for reporting. appreciate it. of "joe biden the life and run and what matters now." good to see you, you literally wrote the book on the president. it's not uncommon to talk to leaders, even the president and have these kinds of conversations. that's happened a lot. help us understand how president biden, joe biden, the man, sort of takes in that outside counsel. >> yeah, i mean, there are business leaders and then there's also warren buffett. he has did of course, jessica, this unique ability to converse to the markets, to the public at large. if that report is true, that's a sign, one, they're going outside to get somebody whose advice is considered -- you know, he's not working for the bank. he's someone who has stepped in, in the past, in 2008 and 2011, to make sure some mistakes that were made in the past, that's important, too. >> evan, not surprising, the republicans were quick to criticize the president not just in smaller but regional banks but response for intervening to banks that aren't essential to th

cnn's matt egan is tracking this for us. s trying to reassure everyone that the banks are fine and that the government and bigger banks will stamp out any fires. has that calmed things here? >> well, brianna, it does look like things have calmed down significantly. you know, janet yellen, she's insisting that this is a confidence problem, it's not a solvency one. and so she is doing her best to try to reassure everyone that the banking system is strong, it's been made stronger by the 2010 dodd frank reforms. and yellen did say that washington is willing to come to the rescue if that's what it takes to put out these fires. janet yellen also sought to draw a contrast between what's going on now and what happened during the great financial crisis, saying that this is not 2008, this is very different. she notes that there's no toxic assets right now. and so we look at what's going on in regional banks. they're up across the board. look at first republic, up 53% today. that is a big rebound after plunging to record lows just yeste

matt egan and john solomon joining us u no. matt egan to you, what are we seeing? >> we are seeing that the pressure is easing here, and the fact that the regional bank shares fell, and republic bank shares were down 62% alone, and bouncing back in a big way, and perhaps more important than what the stock prices were doing, we are seeing what the people are doing with the depossdeposits, senior strategist told our colleague phil mattingly that people are investing in the smaller banks, and this is after washington launched this shock and awe campaign against the scare of banks collapsing. and they wanted uninsured depositors to know that they are protected, and also, this is all psychological, right. panic set in on friday and over the weekend, and hopefully cooler heads will prevail, because we know that the fdic insures $250,000 per borrower per bank, and the federal government will rush in to protect the borrowers as well. >> that is to standup, and standby as well. and how are you seeing this latest check on inflation, rahel? >> well, with this inflation coming

. >>> joined now by cnn's matt egan and cnn economics and economic commentator also a columnist for theshington post." get a refresher, matt. these are not new. how did we get here? >> right. this bank a mess literally for years. we've seen officials around the world scrambling over the last ten days or so to try to put out fires. right? first silicon valley bank then signature here in the u.s. and first republic, regional lender. now all attention on credit suisse. you mentioned landing this $3.25 billion takeover deal from ubs. 6% discount where it was. a big transaction not because of the behemoth but first time since the 2008 crisis regulators allowed one of these big, global banks to merge with another one. in fact, this time it was actually done at the behest of regulators in switzerland really worried. facing a crisis of confidence. this deal is getting applauded i think on wall street. u.s. markets moving solidly higher today. investors are hopeful that this means one of the weakest links in the system is getting strengthened. regional banks in the u.s., they're looking a bit mo

. >> cnn's matt egan is with us.ecessarily related to this new, positive data on inflation. this is related to an international banking issue that is also not connected to the bank failure in silicon valley. did i lay that out? >> that's perfect. i couldn't have said it better myself. confidence is a fragile thing. >> yeah. >> and the bank failures from the last few days in the united states have clearly shaken confidence, and this is a fast-moving story where sentiment is swinging pretty quickly because just yesterday we saw banking stocks race back to life. we saw the stock market rise and it's a totally different story this morning and what we're seeing is regional banks in the united states and they're down first republic, america citizens financial and even some of the big banks. credit suisse is down sharply. that is a bank in europe that has been in trouble for some time. they've been in turmoil, but even some of the big u.s. banks and citigroup and j.p. morgan chase down sharply and investors are worried abou

matt egan has more. >> this happened so fast it's stunning. sill is con valley may not be a household name, but it held $200 billion in assets. behinden opt 2008 implosion of washington mutual. now the fdic seized control of this bank. depositive sorters will get access to the $250,000 insurance limit. we know that startups and individuals hold more than $250,000 at this bank. it's not really clear what's going to happen and whether or not they are going to get all of their money back. so how did we get here? shares of this bank's parent company collapsed 60% on thursday after warning of a rapid need to raise cash. and ta appears to spark a run on the bank with some companies racing to pull their money. this is also a symptom of the federal reserve's war on inflation. we know that interest rates spike d like the ones going on right now tends to break things somewhere in the financial market. we also know that the fed rate hikes hurt the value of tech companies. the same tech companies that silicon valley bank caughters to. it's also hurt the v

matt egan joins us to sort facts. is it fair to call it a ba bailout? here that is bringing back bad memories of 2008. runs on banks, a mad scramble by u.s. officials to try to stop the panic before global markets open, and a massive government intervention. but there are some important distinctions between what happened in 2008. bond and stockholders, they were supported. the exec tys, they kept their jobs and government injected taxpayer money to restore confidence. now today is a different story. because it's really the depositors that are getting bailed out, including a wealthy depositors. but bank managers, they are getting fired. they have been replaced. and also this is not being done with taxpayer money. this is industry-funded money. there's some important disticks here. the fed also launched a new program designed to prevent other banks from getting into trouble. now that lending program is backstopped by the treasury. it allows banks to pledge their bonds. some of which have lost a lot of money. they can pledge those bonds and they can get mo

important week of the economic data indicators here, and what have we heard from powell so far, matt egane is not satisfied with the path of inflation. and now, remember, that powell and the fed have been slamming the brakes on this economy and trying to get the prices under control, but kind of like a stubborn toddler, this economy does not want to seem to want to slowdown. the americans are shop, and the businesses are hiring aggressively and inflation is remaining very high. so that suggests that perhaps the fed has more work to do here, and perhaps they have to hit the brakes harder. listen to what powell just said on this topic. >> the latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated. if the totality of the data were to indicate that faster tightening were warranted we would increase the latest pace of rate hikes. >> and powell called out that some of the inflation numbers are coming in stronger than fed officials expected a month ago, and that is leading the fed inves

we have cnn's matt egan, who's here once again to help make heads or tails of all of this for us. okay, matt, let's start here with the banks. you have secretary yellen saying everything is sound. is that what the markets are saying? >> well, brianna, in a word no. markets remain very much on edge with a lot of of attention right now on what's going on with bank stocks. in particular regional banks. now, as you mentioned, all of these stocks, they were actually down very sharply earlier today. first republic was down 36% at the opening bell. very steep losses after days of steep losses. but look at this. they're all moving higher. first republic is now up 10% on the day. and that's because we have wall street banks. they are in talks to rescue first republic, this ailing regional bank. that's according to a person familiar with the matter. now, these banks that are in talks to rescue this company, they're talking about a major capital infusion. and the rescue would come from the industry itself. bank of america, citigroup, jpmorgan and wells fargo p. these are some of the banks tha

. >> cnn's matt egan is here with more on powell's testimony. hikes and at a larger scale. >> he's basically saying that this war on inflation could drag on perhaps through the summer. the economy is off to a sprosproigz surprisingly hot start. americans are shopping aggressively and inflation remains way too high. in fact if you look at the fed's preferred inflation metric you can see that, yes, inflation has cooled off but it ticked higher in january so that is a problem. and that is despite the fact that the fed has been aggressively raising interest rates. eight straight times they have raised interest rates. notably they slowed the pace of these rate hikes and lowered the dosage of this inflation ng. but after today's hearing investors have started pricing in a growing chance of a 50 basis point move later this month. this is not setting well with wall street. all three major indexes were down on the day. they were basically up changed before powell started talking. what does this mean for main street? high interest rates of course. also po

cnn's matt egan is here now.inesses are laying off workers like it's 2009. >> yeah, in 2009, that was during the depth of the great recession. there's a couple things going on here. one, a lot of companies, especially tech, they overhired during covid, now they're correcting. and also, investors are worried and are cutting costs. if you look at the numbers, almost 181,000 jobs have been cut through the first two months of this year. that is five times the same point last year, it's the most since 2009. what is interesting, though, when you look at the official government statistics, the jobs market looks healthy, although that could be starting to change. new numbers show that initial jobless claims, that's a proxy for layoffs, that jumped by the most since early october. this is a weekly number, but it is worth keeping an eye on. this comes ahead of tomorrow's big government jobs report. that is expected to show that hiring slowed to 205,000 jobs in february. that is a big slowdown frombust january. unemployment

. >> cnn's matt egan is joining us on all of this. att, i mean let's start first of all for consumers, rate hike sounds like a really bad thing, but it seems to also just be the medicine that the fed thinks that the economy needs right now. >> that's right, abby. we're talking about tough medicine, and it can be painful for both wall street and for main street. let's talk about what it means for consumers. we're talking about higher borrowing costs. it gets more expensive to boar r borrow. credit card rates have never been higher. more expensive to buy a car, student debt as well. why the fed chair is concerned, it's really about inflation. this is the fed's preferred inflation metric. it's two things. one, inflation has cooled off from the peak last summer, but also more recently it has picked up in january. so that has been concerning to the fed chair. that's why he's signaling more rate hikes ahead. as you mentioned, this is not sitting well with investors. markets are starting to price in a greater chance of higher interest rates i

hopefully it doesn't happen. >> let's hope no, matt egan and christine romans, thank you very much. >ppreciate it. >>> also this morning, california bracing for even more flooding. the last thing anybody there wants to hear after they were slammed with no less than 12, yes, 12 catastrophic rainstorms. we are live on the ground. >>> and vladimir putin making a surprise visit to russian-occupied mariupol. the same city where hundreds of ukrainian sicivilians were kill as they sheltered inside a theater. one said that putin's visit is like a serial killer returning to the scene of a crime. ( ♪ ) ( ♪ ) you found the one. now find the ring atat zales, the diamond storore. let's get started. bill, where's your mask? i really tried sleeping with it, everybody. but i'm done struggling. now i sleep withnspire. inspire? inspire is a sleep apnea treatment that works inside my body with just the click of ts button. a button? no mask? no hose? just sleep. yeah but you need the hose, you need the air, you need the whoooooosh... inspire. sleep apnea innovation. learn more, and view important safety

cnn's matt egan is here with us. about this potential rescue of first republic bank. >> yeah, bianna and victor, over the weekend, we had this government-led rescue. now it looks like we have an industry-led rescue in the works for first republic bank. that is this regional bank, it's based in san francisco. has almost $200 billion in deposits. now, a person familiar with the matter confirms to cnn that first republic bank is in talks to get a capital infusion from big banks. a group of big banks, that includes bank of america, jpmorgan, citigroup, and wells fargo. now, this news first reported by "the wall street journal" has been given the financial equivalent of a standing ovation over on wall street. regional banks were plunging before this news came out. they've all turned higher. big banks are up. the broader stock market was down on the day. it's moving higher. the regional banks up 11% there, first republic. earlier this morning, it was down 36%. that is quite the turnaround. now, we should note that no deal

let's check in with matt egan. if you will, this takeover, if you will, designed to calm things down, how is that going? >> john, so far so good. wall street is breathing a sigh of relief after a tense week in washington and in europe. and coming to credit suisse, you know, this bank, credit suisse, it's been a problem for years, long before the collapse of silicon valley bank. and really, it was basing a crisis of confidence. share price was imploding. billions of dollars were coming out of credit suisse. it was unsustainable. that's why regulators pushed ubs to come to the rescue and bail this bank out. now, the hope is that this will restore some confidence in the banking system. and shore up one of the weakest links. now, we also have to take a look at what's going on in the u.s. regional bank sector, because that is really the moving -- the wider market. and regional banks are moving mostly higher -- well, they were moving mostly higher. we see some of the banks have turned negative. first republic has been in

matt egan is live at the magic wall to help us understand why that is. tt, regional bank stocks making huge rebound yet as the government stepped in. what's sparking this new drama. >> it actually started overseas, in europe specifically. all the attention is now on credit swede, switzerland's number two lender. just yesterday they actolled material weaknesses in their financial reporting, and today their biggest backer, a saudi bank, said they don't have any interest plowing more money into this bank. let's look at what this stock is doing right now, down 25% today. that's a very big drop for one of europe's biggest banks. look at where they have gone. the stock is now at record lows. look at the regional banking sector. it's kind of mixed today, but the one you said to pay attention to is first republic. this comes after both fitch and s&p said they're cutting the credit ratings of this lender, worried about customer withdrawals. what is interesting is the selling has even spread to some of the biggest banks. j.p. morgan chase down 5%, 6% for citigroup.

matt egan, what is next for the two banks? >> it is shock and awe response from washington, and officials are serious about putting this fire out before it spreads elsewhere. what are they doing? the federal government is guaranteeing that depods sits at the silicon bank and signature bank are going to be insured by the fdic, and by guaranteeing deposits, the government wants to make sure that it is not going to be redone elsewhere aimed at the lend ing practices is this enough? the broader market likes the moves, but the regional bank, they are down sharply. first republic bank, the western alliance, and bank of hawaii, and comerica bank, and first republic bank is down, and despite just last night, they lined up new funding from the federal reserve and from jpmorgan, and so we need to watch that closely, and meanwhile, there are new question about silicon valley was allowed to implode in one place. i spoke to one customer who was expressing shock that the management expressed the depth of the public problems before lining up

. >> cnn business reporter matt egan processing all of the new inflation data which met expectations, and what is the new consensus this morning? >> well, jim and erica, it is saying that inflation is not gone, but it is cooling off. 6.5% increase in consumer prices over the last six months is not good, but it is triple what is considered healthy, but everything is relative. as you can see on the chart, the trend is going in the right direction, and this is eight straight months of cooling inflation, and this is the smallest increase in consumer prices in 17 months, and all signs of progress. if you are looking and digging into the report, you can see that some things are still getting much more expensive. groceries up by 10% from a year ago and natural gas, pet food, airfare, all of them increasing. the question of course is what does the fed do. so even heading into this month, they face the impossible question of getting the fed under control without breaking something in the real economy or the financial markets, and now we are learning that something does appear to have broken an

matt egan has more. >> this happened so fast it is stunning. sloven valley bank may not be a household name but it is the serk biggest clams of a bank in u.s. history behind only the 2008 implosion of washington mutual. now the fdic has seized control of this bank. the fdic says people will get access to their deposits up to $250,000. but small businesses and households hold more than $250,000. it is unclear whether they'll get all of their money back. how did we get here, and how did we get here so fast? shares collapsed 60% on thursday after the rapid need for cash and that appeared to spark a run on the bank with some companies racing to pull their money. this is also a symptom of the federal reserve's war on inflation, because we know interest spikes like the ones going on now, tend to break things in the financial market. we know the fed's race, the same tech companies that silicon valley bank caters to. it also unscheduled meeting on friday to discuss this bank failure, and i spoke to treasury deputy secretary wally ateamo and asked him w

. >> matt egan is joining us, and everybody is paying attention to the secretary this morning and the words, and she is getting out ahead of this a little bit with the words telling americans to be calm and their money is safe. >> yes, this is a big moment for the treasury secretary and she knows that confidence is a fragile thing, and she knows that it has been shaken by the failures, and she wants the americans to know that the money in the bank is safe, and in the prepared remarks, and americans can feel confident that their deposits will be there when they need them, and she points to what she describes as, quote, decisive and forceful actions to what the officials took over the weekend when not one, but two banks collapsed and she points out that deposits in those banks were safe and notably even before the $250,000fdic insurance limit. that is the message of the u.s. officials, and looking at the market, and the market is telling a different story, and the u.s. stocks are opening lower and looking at the bank stocks and the u.s. regional banks are the top line, and the first rep

matt egan is joining us. another u.s. bank was on the line, and they got a important help not from the government, but tell us about it. >> what a week. we have had bank failures and government rescue, and now this. this is the parent company of silicon bank filing for bankruptcy this morning. this does not include the silicon bang itself which is taken over by the significant step of the unwinding of the business. and now the u.s. markets are opening modestly and giving back the big gains. there was a modest enthusiasm over this u.s.-led bank was stabilize, but the regional banks are all down sharply this morning including the public bank down 17% giving back the yesterday's games, and pfitch bang said they could come down to downgrade first republic's credit rating despite this $30 million rescue. we should mark how remarkable this rescue is. 11 of the nation's biggest banks to team up to donate $30 million. >> look it is in their best interests, and it is not this big overall selfless move, pause they have skin in the

matt egan is joining us to talk about another weekend of the officials around the world scrambling tol up. what are you seeing? >> they were skrablg opened sunday night, and so it was a sig dwra nifr valley before, and now it is about credit swesz. this is and so, it is interesting to see that from friday, and credit swiss was in trouble since friday and they were doing this and losing it from friday and so they have to sweeten the deal to protect it from $9 billion in loss, and the swiss central bank is providing up to 2 billion in loans to make it happen, and people are wondering why we worry about what is happening in the swiss banking system, and it is because of the 2000 banking crisis of how interconnected everything is. and also, the failure of shaking the banking system sof how everything is connected around the world with the crisis. and now, moody's and s &p did down grade the banks after the recapture there. and so the small and the medium-sized are stabilize. so they have either eased or reversed which is what washington wants to see. >> and what the company needs at this

testifying and saying that the interest rates are like toy rise higher and faster than we thought, and matt egan is following this one. what are we learning? >> well, kate, the fed chair is acknowledging that the fed inflation numbers and the consumer spending and the numbers are coming in higher and hotter than expected and the fed is doing everything to cool the inflation and the economy off, and powell say that it is going to suggest that the interest rates have to go higher than anticipated, and that a big deal for people at home, because it is higher costs of borrowing mortgages and cars and credit cards interest going to go up, and if he does too much, we could slide into a recession. so powell was asked about this dangerous game of chicken, and whether to raise the debt ceiling or the default on the u.s. debt. this is what he said about that. >> congress needs to s to raise debt ceiling to pay our bills when they are do, and if we fail to do so, the consequences are hard to estimate, but they could be extraordinarily adverse, and do long-standing harm. >> so just how adverse, and moody's

and so we are joined by matt egan, and so does that mean it is going to ease concerns, it is difficultponding, but this is after a series of losses in the last week or so. there is a confidence problem, because banking is a confidence deal. >> hubris. >> yes, but too much is a bad thing as well as what we have right now which is shortage. so we have weakest link to weakest link. going to ubs coming to the rescue to the 2.5 billion deal to buy the ailing rival, and the swiss government is forced to sweeten the deal and putting up $9 billion to take on potential loss that ubs could take on, and the central bank is providing 2 billion in loan, and so this is the first of the systemic banks since the global crisis, and this is the forced marriage, because they have forced ubs to do it, and they did not want to buy credit suisse, because it has been a train wreck for years, but the regulators forced them to. it is like if john's new england patriots were told to buy the new york jet, because they keep losing, and it is bad for the league, and the patriots are like, well, why should we -- >>

cnn's matt egan joining us now. this slide being driven by the second biggest bank failure in u.s. h

matt egan has the details. >> reporter: so jerome powell is essentially saying that this war on inflation could drag on, perhaps into the summer. and here is why. despite the fed's best efforts to cool things off, the economy gotcha off to a very hot start this year. hiring boomed in january. retail sales skyrocketed. and here is the big problem, inflation remains way too high. and in fact if you look at the fed's preferred inflation metric, it shows that while price gains have cooled off in the past nine months, they unexpectedly heated up in january. and inflation remains well above the 2% that the fed is targeting. listen to what powell had to say about what all of that means for interest rates. >> although inflation has been moderating in recent months, the process of getting inflation back down to 2% has a long way to go and is likely to be bumpy. as i mentioned, latest economic data have come in stronger than expected which suggests that the ultimate level of interest rates is likely to be higher that be previously anticipated. >> reporter: in other words, more tough medicine is pro

. >> matt egan is here with us now.s mean for interest rates potentially and inflation? >> this jobs market remains hot, surprisingly hot. look at the numbers. 311,000 jobs added in february. now this is a slowdown from january, but make no mistake, this is strong growth, especially after all these jobs added in the past year or so. where are these jobs? rapid hiring in leisure and hospitality, bars and restaurants, retail, government also adding jobs. the unemployment rate spiked up to 3.6%. it's still a major improvement from almost 20% in 2020. where does this leave up? the white house was hoping for a goldielocks number. we got a mixed number. hiring is hot, but we also got a slowdown in wages, the slowest pace of wage growth in a year. workers don't like that, but it's good news for the fed. also, the supply of workers, as president biden mentioned, that is improving. this is the labor force participation rate. it crashed during covid. it's slowly improving to the best levels since march of 2020. what does the fed

matt egan is tracking this for us. looking at the big banks and the little banks right there. ppening with the markets right now? >> it's all about the banks. investors are bracing for the next shoe to drop after the bank failures of recent days. regional bank stocks are tumbling again, big banks, as well. citigroup, j.p. morgan. they're down sharply, but all eyes are on credit suisse. you see it's down 16%. >> yeah. >> they're at record lows. this is a big european lender and it's worth noting that this bank has been in turmoil for years. one veteran compares it it to a slow-moving car crash. they don't want to invest any more money, any new funding in this bank and they're citing regulatory reasons because that would require them to face new rules. no matter the reason this is amplifying concerns about the banking sector. i do think we have to separate out what's happening with bank stocks and what this means for people who have money in the bank because fdic insures up to $250,000 per bank per borrower and the last few days it showed the government is willing to support you

matt egan and m.j. lee are standing by to have a look at what this means while we wait for the president. what stands out for you, matt? >> it is amaze, kate, that the economy is still adding this many jobs despite the federal reserve's warnings, and despite the jobs gains, and people are still being hired at a rapid pace. and so, 311,000 jobs added in february, and this is how strong the job market is, and hiring slowed significantly in february, and yet, i still came in at a strong levelsh and a level well above expectations, and so no sign of a recession here at all. the unemployment rate ticked up to 3.6%, but remember, that is coming off of the 53-year low in january, and a massive spike that you can see on the screen, and the reason that the unemployment went up is because more and more people are looking for work which is a good thing, and when you are digging for the numbers, you can see that a lot of sectors are going to be adding to the leisure, and government and retail, and all of them adding

. >> matt egan joins us live.l markets here in the states and around the world. >> that's right. and the public at large. secretary yellen is trying to restore confidence in the banking system. there's been a bit less calm on wall street. you look at what the stock market is doing specifically bank stocks. regional bank stocks have gotten clobbered in recent days. first republic bank, a san francisco bank lender, it's down 19%, as we speak. but what's notable is that in the last few hours, the"the wal street journal" is reporting that first republic bank is in talks over a rescue from big banks, including jpmorgan and citigroup. this rescue would include a sizable cash infusion. now the bank itself is not commenting, but this is a big deal. even just the report of a potential rescue from wall street is lifting the broader stock market. the dow is up over 150 points. and you see the s&p and nasdaq up. we have already seen a rescue of sorts mounted in europe. where the s is uisse bank provided a $50 billion lifeline

cnn's matt egan has more. >> reporter: this happened so fast. it is stunning.y bank may not be a household name, but it held $200 billion plus dollars in assets making it the second biggest collapse of a bank in u.s. history behind only the 2008 implosion of washington mutual. now the ftic seized control of the bank saying that depositors will get access to their cash by monday morning up to the $250,000 insurance limit, but we know some start-ups and individuals and small businesses hold more than $250,000 at this bank. and the not really clear what's going to happen and whether or not they're going to get all of their money back. so how did we get here and how did we get here so fast? shares of this bank's parent company collapsed. 60% on thursday. this after warning of a rapid need to raise cash. that appeared to spark a run on the bank with some companies racing to pull their money. this is also a symptom of the federal reserve's war on inflation, because we know that interest rates spikes, like the one going on right now, tends to break things somewhere in

matt egan, thank you for that report. some analysis on the impact of the collapse from dennis kellerher, he works for a nonprofit. thank you so much for sharing part of your saturday with us. as matt pointed out, most experts are saying that this is likely an isolated incident, there will not be contagion or a domino effect to the scale of 2008. you argue, though, that this failure will almost certainly lead to more bank failures. why? >> it has to be remembered, thank you for having me on and good morning, matt did a good setup here. there were three key drivers of this bank failure. the first one was the mismanagement of the bank. the second one is the impact of the interest rate hikes and the third one is the lack of regulation and supervision due to deregulation, which the ceo of silicon valley bank personally lobbied for back in 2015, '16, and '17. so some of the characteristics of silicon valley bank are unique, but some are common to many other banks. the unique ones matt talked about well. the common ones arise fr

matt egan has the details. >> reporter: this happened so fast, it is stunning. silicon valley bank may not be a household name, but it held 200 plus billion in assets, that makes it the second begs col biggest collapse behind only the 2008 implosion of washington mutual. now the fdic has seized control of this bank. the fdic says that the depositors will get access to their cash by monday morning up to the $250,000 insurance limit. but we know some startups and individuals and small businesses hold more than $250,000 at this bank. and it is not really clear what is going to happen and whether or not they will get all of their money back. so how did we get here so fast? shares of this bank's parent company collapsed 60% on thursday after warning of a rapid need to raise cash. and that appeared to spark a run on the bank with some companies racing to pull their money this is also a symptom of the federal reserve's war on invasion -- inflation because we know interest rate spikes tends to break things somewhere in the financial market. and we also know that the fed

matt egan tracking the latest on all of this. what's the latest on these investigations, matt?at does that mean? >> this was a historic banking collapse. the second biggest in american history. you got to believe that regulators and authorities are looking into potential wrongdoing here. paul reed did confirm that the justice department is, indeed, investigating the collapse of silicon valley bank. "the wall street journal" reporting that the scc is also investigating. we don't know whether these investigations are going to come up with any sort of wrongdoing. but the journal reports that both the doj and the s.e.c. are looking into both the collapse here and security sales done by bank management. the s.e.c. declined to comment. just yesterday chairman gary gensler said we at the s.e.c. are particularly focused on monitoring for market stability and identifying and prosecuting any form of misconduct that might threaten investors or the markets more broadly. he vowed to bring enforcement actions if they find anything wrong. this is on top of the fed launching just yesterday a r

. >>> for now bring in cnn economics commentator opinion columnist katherine rin pel and matt egan. th of you have been covering this over the last several days. matt, are you surprised what the president said yesterday was not enough to just calm everybody down and help these regional banks out? >> i'm not surprised only in the sense that fear is a powerful thing. a lot of this is psychological. we haven't talked about a major bank failing in a long time. i think people are understandably nervous. but i do think that everyone needs to take a deep breath, remember the fdic ensures up to $250,000 on deposits. they have been doing 250,000. for vast majority of people that covers it. now they're saying, listen, we'll actually ensure more than that, at least in these instances when these two banks collapse. i do think everyone needs to calm down a bit here. >> okay. psychological, do you agree with that? listen, we have the -- moody saying they're going to place six other u.s. banks on review for potential downgrades. i mean, that has a ripple effect on the economy. do you think it's mos

our matt egan reporting over the weekend a source telling him that the outflows from some regional banksn the u.s. have slowed. it's all about restoring confidence. last night just about 45 minutes before the asian markets opened we had this, you know, global -- global intervention in the currency markets to make sure that their dollar swap dollars are flowing to central banks. it sounds wonky but that's another example of trying to restore -- >> i got the restore and it made no sense to me. >> but you knew it was important. it's another way to make sure confidence can be restored in the banking system into on the one hand it tries to restore confidence if someone buys credit suisse, on the other hand you're rattled because someone has to step in. >> it reminds you that confidence has to be restored. that's what's to freak would he about the banking system, the fundamentals can be find and credit suisse regulators were saying credit suisse could have made it, could have kept going, but it was twitter and then the weakness from the regional banks in the u.s., they were blaming the u.s. on

cnn's matt egan is in town for the fed's meeting.e a fore gone conclusion about another increase appears up in the air because of the crisis involving bank failures. >> that's right. the fed finds itself in kind of a no-win situation here. they do nothing, it looks like they're scared of the banking crisis, and they're accepting high inflation, but if they keep raising rates, they could actually make the pressure in the banking system even worse so this is a very difficult position for them. and there's been a lot of debate about what they're going to do. sheila bear wants them to kind of do nothing, hold steady, look at the damage before keep raising interest rates. goldman sachs predicts that's actually what they're going to do. over on wall street, investors are starting to coalesce around the idea that they're going to raise interest rates. at last, look, there's now an 87% chance priced into the market that the fed raises rates by a quarter of a basis point. that figure has been growing all day and all week, for everyone at home

and i think that's what matt egan was getting to there. management of the company should have been able to raise $2 billion without sending the whole thing down the tubes, right? that's what the complaints are inside the company. this management should have been able to manage interest rate risk, which is how you run a bank, you manage interest rate risk, and they did not do that properly. and what kind of pressure to your point does this put on the federal reserve? goldman sachs this weekend in a note to clients said, they don't think the fed will raise interest rates at all because of this. because there's stress in the banking system right now, and we know that this bank broke and other banks have broken because of the rapid pace of interest rate increases. >> is that good for consumers that they're not going to do that. >> it is, unless inflation is a real bad problem. and this delays their ability to get inflation under control. it's a bunch of tough choices over at the fed. >> the reality is, gary becker, the ceo was also, until a fe

. >> you said this weekend to my colleague matt egan that the fed should pause raising interest ratesing they should not raise rates at all. >> right. >> next week. what happens if the fed does raise even 25 bases points next week? >> right. well, 25 bases points would probably be less bad. i do think they should hit pause. i said that last december. look, i'm an inflation hawk. i've been arguing for normalizing interest rates since 2010. i have not liked this extended period of loose money, of cheap money. but, you know, if you look at where they started, they've raised rates by 6,000 percent. they started at .08 and now 4.5. they need to hit pause and see what the impact of this will be on the financial system and the overall economy. so, yes, i do think that would be prudent. they can tighten later, but now they need to stop f they need to. now they need to stop and assess. >> many fingers pointed many directions, many at the 2018 roll back of part of dodd-frank, basically raising the bar for when a bank is considered systemically important. a lot of these banks of concern fall bel

. >> let's bring in matt egan. what else should we expect from this meeting?st important fed decisions of the jay powell era. just under 24 hours, the fed is going to announce its decision here. and over the past year or so, they've been waging this really aggressive war on inflation. we always knew there was a risk that that could backfire because history shows that the faster they raise interest rates and the higher they go, the more likely that they break something. and so now we learn that something has broken, specifically the banking market with these bank failures. and so now there's a question, what is the fed going to do? a former fdic chair sheila bear, she wants the fed to pause and survey the damage. and goldman sachs has predicted they will pause, not raise interest rates so they don't worsen the pressure in the banking market. but there actually is growing confidence among investors that the fed is going to go ahead and raise interest rates despite the bank failures. there's an 84% chance being priced into the market that the fed races interest r

cnn's matt egan joining us now. this slide being driven by the second biggest bank failure in u.s.istory. what happened? >> erica, this happened so fast. it's stunning. silicon valley bank shut down by california regulators after the stock crashed by 60% yesterday after the bank said it needed to rapidly raise cash. this is easily the biggest bank failure since washington mutual fell apart in 2008 during the financial crisis. silicon valley bank, if you haven't heard of it, it is a major lender to tech start-ups. the fdic says that depositors that have $250,000 or less, they are insured here. they will get their money. they will get access to their money as soon as monday morning. but we know that some people, some entities, some start-ups, they have more than $250,000, and it's less clear what's going to happen to them. how did this happen? well, when the fed spikes interest rates, things tend to break. we know that the fed rate hikes have hurt the valuation of the tech companies that this bank catered to, also has hurt the value of the bonds that banks rely on to get cash. erica,

matt egan is here to explain. are things stabilizing here?ring an that, the mood on wall street is certainly improved, but this is a fast-moving situation, and sentiment can change in the blink of an eye. let's look where u.s. markets are trading right now. the dow is up 400 point, 1.2%. this is near session high, the nasdaq, the s&p moving higher as well. so what we've seen is that officials around the world are moving from the weakest link to the weakest link in the banking system trying to put out fires, first it was silicon valley bank and signature bank, the two lenders that collapsed recently then the industry came to the rescue of first republic and now all the attention is on credit suisse so what's happening here? ubs agreed to buy them for $3.25 billion. that's a 60% discount to where this stock was trading on friday. they're getting a lot of money from the government and from the swiss central bank to try to backstop the losses and, as you mentioned this, did a banking giant with $1.7 trillion in assets. as you can see credit suiss

cnn's matt egan is with us now. tell us more about this bank that maybe most americans may not have heard of. >> sort of like silicon valley bank that not many people had heard of before last week. it became the second biggest bank failure ever in u.s. history. now a lot of attention has been on first republic bank. a san francisco based bank, has almost $200 billion in deposits. the stock had been plunging over the last week. moving higher today, up 7%, but you have to remember, this morning, it opened down 36%. the turnaround was driven by the fact now there's this industry-led rescue effort, a source familiar with the matter confirms to cnn that big banks including jpmorgan, wells fargo, citigroup, bank of america, and truest, are in talking to provide a life line to first republic bank. now, this would be structured as deposits. about $30 billion in deposits that would go from the big banks to first republic. and the goal here would be to try to provide them some additional financial firepower to offset some of

cnn's met egan is tracking all this for us. he joins me now, matt it does feel like another day, another crisis that you're reporting on what's happening with deutsche well, kate, you know, investors are just waiting for the next shoe to drop their kind of going from weakest link to weakest link in the financial system. you know, first, it was silicon valley bank and signature bank that was first republic. then it moved overseas , and the focus was on credit suisse, and now all eyes are on deutsche bank. deutsche bank shares, they're down pretty sharply. almost 11. some of these concerns have been triggered by a spike in the cost to ensure deutsche bank's debt. that is never a good sign. i would note, though, that deutsche bank's been in turmoil for years. this is not entirely new, but the bank failures in the united states really forced investors around the world to take a tougher look at banks and as you can see a regional banks in the us they're kind of mixed right now. first republic is the one that's getting the most attention down another 2% i