Despite assurances from the financial services company that it has plenty of funds, Charles Schwab's stock fell as much as 23% on Monday, its biggest daily decline ever. During the session, the stock partially recovered those losses.Charles Schwab stock falls as it assures company is 'well-positioned' amid financial sector turmoil. Schwab's assurances come after the collapse of Silicon Valley Bank and the closure of Signature Bank of New York (SBNY). On Sunday U.S. regulators announced depositors of both lenders will be made whole, along with measures to shore up confidence in the banking system.
“We have access to significant liquidity, including an estimated $100 billion of cash flow from cash on hand, portfolio-related cash flows, and net new assets we anticipate realizing over the next twelve months,” said chief financial officer Peter Crawford in a statement highlighting the firm's monthly activity. “Schwab is well-positioned to navigate the current environment as we continue to serve clients and build the future of modern wealth management,” said the press release.
Schwab's assurances come after the collapse of Silicon Valley Bank and the closure of Signature Bank of New York (SBNY). On Sunday U.S. regulators announced depositors of both lenders will be made whole, along with measures to shore up confidence in the banking system.
“I was happy to see that the Fed jumped in and secured deposits because these are classic run on banks issues, that without confidence you could see a number of banks suffer,” Solomon Partners CEO Marc Cooper told Yahoo Finance Live on Monday. Despite the stop-gap measures, regional bank stocks were still getting severely hit. Shares of San Francisco-based First Republic Bank (FRC) declined more than 60% and were repeatedly halted for volatility. “Here it’s just a question of fear. It’s a question of the classic run on the bank,” said Cooper of Solomon Partners, who confirmed he holds funds in First Republic and will keep them there. "Generally speaking what we've learned from the past is they don't end quickly. These tough times don't end quickly."
