Stock Market: Schwab Stock Implodes Amid Financial Freakout – Is Your Money Safe?

It looks like the financial-stock market freakout is affecting more than just local banks. The largest brokerage firm in the USA, Karl Schwab (BLACK), also feels the heat.


Schwab’s shares are down nearly 30% in the past two trading days, making it the 11th-worst performing financial stock in the S&P 1500. Investors fear it too could be sitting on a pile of uninsured deposits from high-tech companies like the failed Silicon Valley Bank.

This isn’t just a blip. According to Dow Jones, the drop in Schwab stock would be the largest percentage drop on record (based on data going back to September 23, 1987).

The impact on the stock market is enormous. Schwab is arguably the largest online broker with $7.4 trillion in assets under management as of March. There are more than 34 million accounts with the company. More than 80% of bank deposits are FDIC-insured, Schwab says.

Schwab is vocal in defending its financial strength: “Schwab has a broad base of high-quality customers across multiple businesses, capital well in excess of regulatory requirements, a high-quality and relatively small loan book, and a conservative investment portfolio 80% consists of securities issued by the U.S. Treasury and various government agencies,” said Mr. Charles Schwab and CEO Walt Bettinger in a joint statement.

What does this mean for customers? Remember, bank accounts with Schwab are FDIC-insured for up to $250,000. In addition, securities and cash held in brokerage accounts are insured by SIPC for up to $500,000 ($100,000 cash limit).

Biggest Two-Day Financial Drops

Pursue ticker 2 days change
First Republic (FRC) -80.2%
Customer Bancorp (CUBI) -72.9%
PacWest Bancorp (PACW) -72.2%
Comerica (CMA) -46.8%
East West Bancorp (EWBC) -41.9%
KeyCorp (BUTTON) -38.0%
Zion Ban Corporation (ZION) -36.4%
UMB Finance (UMBF) -32.8%
Banks of Hawaii (BOH) -30.6%
Fifth Third Bancorp (FITB) -29.0%
Karl Schwab (BLACK) -28.9%

Follow Matt Krantz on Twitter @dull wreath


There is a new world order as 4 major stocks fall to pieces like Tesla Stock Market: Schwab Stock Implodes Amid Financial Freakout – Is Your Money Safe?

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