Listen: Weekly Wrap discussion on Credit Suisse

Silicon Valley Bank ’s collapse continued to reverberate through financial markets last week into Europe as Swiss bank Credit Suisse was absorbed Sunday by its top competitor, UBS Group . SVB’s collapse likely will mean increased regulation for midsize banks as liquidity concerns mount. SVB parent SVB Financial filed for bankruptcy last week, as did American Car Center parent RAC Asset Holdings . Meanwhile, subprime auto lender Consumer Portfolio Services “ tightened credit dramatically ” in the fourth quarter, and automation fintech Open Lending saw an uptick in bank interest in its loan protection product. In this episode of the Weekly Wrap, Editor Joey Pizzolato discusses the week’s top stories and what to expect in the week ahead. Subscribe to “The Roadmap Podcast" on iTunes or Spotify or download the episode. Auto Finance Summit East, Auto Finance News’ new spring event, is scheduled for May 10-12 at the JW Marriott Nashville featuring a fireside chat with Peter Muriungi, CEO of Chase Auto. Visit autofinance.live. Transcript: Editor’s note: This transcript has been generated by software and is being presented as is. Some transcription errors may remain. Joey Pizzolato 0:08 Hello, everyone, and welcome to the roadmap from auto finance news since 1996, the nation's leading newsletter on automotive lending and leasing. It's Monday, March 20. And I'm Joey Palazzo running solo today. This is our weekly wrap on what happened in auto finance for the week ending March 17 2023. In global financial news, Silicon Valley Banks collapse continued to reverberate through financial markets last week and through the weekend in Europe as Swiss Bank Credit Suisse, was absorbed by its top competitor UBS group. Credit Suisse this fall much like Silicon Valley Bank and Signature Bank was rapid unfolding during trading hours Wednesday and concluding on Sunday when Swiss bank UBS group absorbed the failing investment bank following a 50 billion capital injection from the Swiss National Bank on Friday. For auto finance Credit Suisse's collapse will likely have little direct impact on the industry due to the fact that investment that the investment banks so most of its structured products to Apollo Global Management. Paula stood up a standalone credit firm Atlas SP on February 8, in tandem with the closing of the deal. A majority of the assets and professionals associated with the transaction are now part of or managed by ATLAS SP partners the company said liquidity concerns, however, and talk of a quote, contagion do pose major risks to auto financiers as is turned to the FOMC meeting this week. Economists are sticking with expectations of a quarter point hike to combat inflation even as the Federal Reserve double deploys tools to increase liquidity in the financial markets. In fact, data released Thursday showed banks in the US borrowed a record amount from us a record amount from Fed backstop facilities in the week ending March 15. Topping a previous high reached during the 2008 financial crisis and signaling widespread funding strange. To be sure our funding in capital markets is getting tighter again, evidenced by Santander Consumer USA is delay of its 400 to $942 million subprime issue and last week, Bloomberg reported started citing, quote, market volatility. Consumer portfolio services tightened credit considerably and raise interest rates in 2022 to maintain margins amid rising cost of funds. The company announced last week in its fourth quarter earnings release. The lenders APR rose to 21% in Year End 2022 compared with 15.99% in February 2022. originations fell 8.6% sequentially in the fourth quarter to 428 point 1 million but jumped 30.5% year over year. According to the q4 earnings release for year 2022. originations tallied 1.8 5 billion of 61.8% year over year. Finally, midsize banks can also sue should also soon expect increased regulation as the result of SB NPS collapse regulators are using metrics such as the relative position of uninsured to insure deposits in a bank's portfolio to measure risk across similarly asset size financiers following the collapse. Alison and bird partners Cliff Stanford told auto finance news this week we will certainly be certainly be looking at the continuing effects of SP VBS collapse and uncertainty in the financial markets. That about does it for today's episode. Thanks for joining us on the roadmap and be sure to follow us on LinkedIn. We will see you online at auto finance news.net and here next time

Listen: Weekly Wrap discussion on Credit Suisse

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