Bank of America Corp., Citigroup Inc., and JPMorgan Chase Co warned employees: Do not make it worse, as a series of US banks were besieged by customers who have been yanking out of their money this month.
JPMorgan, the nation's largest bank, told all employees that they should never give the appearance of exploiting a situation of stress or uncertainty, in a March 13 memo, extracts of which were seen by Reuters. We don't make disparaging comments about competitors. The leaders of its consumer and business banking unit told branch employees on the same day: We should not solicit client business from an institution in stress, according to extracts seen by Reuters.
A source familiar with the matter said that Citigroup has given similar guidance to its business heads. The guidance does not speculative about other banks or market rumors.
The lender sent a memo reminding bankers that they should not discuss the standing and condition of other firms in discussions with prospective customers, the source said.
A source familiar with the matter said that top executives at Bank of America Corp were told by top executives that they should not be going after the customers of distressed firms or doing anything to exacerbate the situation.
The memo to staff on Thursday said that we should not engage in any activity that could be perceived as taking advantage of the current situation to the detriment of others. The bank runs that toppled the Silicon Valley Bank SVB and Signature Bank, the second and third largest banks in the US history, prompting customers to move about half a trillion dollars of deposits from the most vulnerable US banks to bigger institutions this month, according to JPMorgan analysts led by Nikolaos Panigirtzoglou.
As the SVB teetered, billions of dollars in deposits were poured into the nation's banking giants, which are required by regulators to hold more capital to withstand shocks. The loss of confidence that shook the banking system in the last two weeks sparked concerns about a contagion that could lead to a broader panic.
The turbulence caused regulators to guarantee the deposits of SVB and Signature. President Joe Biden, Treasury Secretary Janet Yellen and Citigroup Inc. Chief Executive Jane Fraser have made statements in the past few days to reassure the public that the US banking system is safe.
A JPMorgan spokeswoman said that we all have a vested interest in keeping America's financial system strong and thriving. It is the envy of the world with thousands of institutions of all sizes serving every corner of the country.