Silicon Valley Bank collapsed Friday morning after a stunning 48 hours in which a bank run and a capital crisis led to the second-largest failure of a financial institution in US history.
California regulators closed down the tech lender and put it under the control of the US Federal Deposit Insurance Corporation. The FDIC is acting as a receiver, which typically means it will liquidate the bank’s assets to pay back its customers, including depositors and creditors.
The FDIC, an independent government agency that insures bank deposits and oversees financial institutions, said all insured depositors will have full access to their insured deposits by no later than Monday morning. It said it would pay uninsured depositors an “advance dividend within the next week.” CNN's Matt Egan reports. #CNN #MattEgan #cnnnewsroom
I bet the CEO’s got their money out
Pelosi did
@Joys Boy Exactly:
Well of course. They knew what was coming. These things are seen , but that information isn’t passed along usually. Like the company you work for. They go through ups and downs, but they don’t share that with the employees every time or they may lose them.
They had their money in offshore accounts their money wasn’t in the bank that they run They are very smart.
Of course they’re going to say “this is an isolated incident” they don’t want to scare the masses
@kay armstrong The data shows no need to panic. Bank failures have became rarity compared with the past. And even if it failed, plenty of assets to recover.
Yes, risk of contagion to other banks and companies that lose from this bank collapse
@Mars Black YEP! That’s all it takes! One domino topples the entire line!
Just wait till Monday.
Bank runs are gonna be wide scale throughout.
Since 2008, if congress was competent enough, those corrupt ceos should’ve been charged and order to be broken down into smaller banks instead of bailing them out under taxpayers money.
the federal reserve system (progressive invention) is conducive to a few number of massive banks because *that’s who the federal reserve system was designed to serve* Woodrow Wilson was great friends with JP Morgan, and frequently met with his associate while designing the federal reserve system
They stole money in salary’s. Ridiculous how much they get paid! SMH
The US has become 70% dependent on consumer spending alone to drive its economy. No longer employed in full-time jobs , w/ benefits, workers get caught between declining purchasing power and soring health care costs. Many workers additionally suffer under a global ‘wage race to the bottom’ as corporations seek the low cost supplier (wherever they may be off shore). The Middle class has become a “vanishing class”.
@Stephen Corsaro you’re grasping at straws when the word Fascist is used incorrectly.
What’s the alternative? Supply-side economics? We will be doomed if that happens.
@Steve Stoll just trying to avoid putting the final one on the camel’s back.
At least we aren’t digging cobalt.
I used to work at SVB in 2021. I left by early 2022. I saw the writing on the wall. They were handing out loans like they were candy. Management didn’t care.
It’s a crash. I lost 40000$
@USMC Valhalla BANK RUN IS GOING TO HAPPEN SOON.
…and everyone else has subprime auto loans.
Access to Fractional Reserve Lending and still failed? Wow.
Here we go! (we’ll see if this is just an isolated thing) But… Better to be prepared.
This is the bank of most VC-funded companies and high-end wineries. This is not a normal bank, so it should not impact other banks. However, the $250,000 FDIC guarantee is laughable as many of these companies have $10M or more at the bank.
I’m pretty sure it’s more to insure the average person than companies
SVB FINANCIAL GROUP
“Our Global Diversity, Equity & Inclusion Commitment SVB is committed to creating a more diverse, equitable, inclusive and accessible environment within SVB, within
the innovation ecosystem, and in our communities. At the heart of this commitment is our effort to foster a more inclusive culture and increase racial, ethnic and gender
representation within SVB. In the broader innovation economy, we are focused on breaking down systemic barriers to entry and success, investing in opportunities that ensure more founders and investors with a range of experiences and ideas are represented in our ecosystem. We strive to use our resources, voice and influence to help build strong communities and contribute to economic and
social progress where we live and work.”
How’d that all work out?
All those companies won’t be able to pay their employees because of that and here we go with the trickle down effect
I love how one day the bank is just fine and worth 20 billions dollars and 1 week later it is bankrupt. Is the Fed going to guarantee all those deposits again. We just have to let these banks fail. The minute other countries realize we are incapable of paying back out debt the party is over.
No you’ll never get it back
@henry newton Mmmhmmm ya okay kid.
Bank run is going to happen soon!!
@el_farmboy I’m here for it.
“The major banks are saying they’re well capitalized”
Yeah I’m sure SVB would’ve said the same thing.
They’re hardly going to say guys we are fucked arw they.
The new owner have to look at each loan separately and then as a group in industry they serve. Deposits are solid. I hope there is no more panic as the fed tightens, it will definitely cause more bank runs.
I work in banking. It really depends on how liquidity is managed by the bank. With the interest rate hikes people myself included have opened new bank accounts and transferred money to get the best rate on deposit. This is problematic when the banks have invested most of the deposits on fixed rate treasuries and cannot offer competitive rates for their depositors. If they bought the US treasuries at a lower fixed rate and people are pulling their deposits to park it somewhere else the bank would have to forcefully sell their treasury positions at a lower market value to provide liquidity which can cause huge realized losses for the bank!
Never keep all your money in the bank period.
You can increase the limit of FDIC by increasing the number of beneficiaries in the account, as it doubles the limit. Two people = $500k. … FDIC will give access quickly to the insured amounts, but after it does the accounting, it can release more to those who have more than the limits. Also money can be recovered when the assets are sold.
*Greed, reckless behaviour, speculation* and *carelessness of management* always leads to disaster not only for banking sector but for any industry.
However such behavior is extremely profitable on the short term where bonuses are paid. It is only fatal in the long term. And in modern US capitalism nobody cares about the long term. Only the financial report of the next quarter is what anybody cares about.
@Nick LThey say that investing and long term approach is boring but speculation and gambling is fun. The Wall street way…
To my understanding this just proves how much we need an edged as an investors because playing the market like everyone else just isn’t good enough. During a raging bull market, all other investors purchase at a premium, Investors who purchase during
weak markets have three characteristics:
company knowledge, conviction, and a
long-term outlook. I’ve been quite ensured about investing in this current market and at the same timeI feel it’s the best time to get started on the market, what are your thoughts?!
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I don’t know how anyone in America trusts banks? I’ve been with credit unions since a Sargent told me about them when I joined the military in 1972…I’m still with them. Never had an issue, best security when it come to my credit and debit cards.
Have a friend who works in the banking industry. I asked if they knew if anything was going on with the other banks and financial institutions. Reply was that the employees are kept in the dark and will probably find out when they go to work one day and are sent home.
I love the calm way he says ‘isolated incident’. Not on your life is this isolated. This is the tip of the iceberg it’s far broader and systemic an issue than thought possible. Recession, already started. Economic depression pending arrival imminently.
As crazy as it sounds, this might be the kind of thing the stock market needs. This will cause massively deflationary pressure which may cause the Fed to be less aggressive with future rate hikes