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2023-03-12 17:19:50

ItsMe on Nostr: [apnews com] > Silicon Valley Bank, the nation's 16th-largest bank, failed after ...

https://apnews.com/article/svb-fed-bonds-rates-banks-inflation-a24b28b3caeede91c76cd120aa9b7966 [apnews com]

> Silicon Valley Bank, the nation's 16th-largest bank, failed after depositors hurried to withdraw money this week amid anxiety over the bank's health. It was the second biggest bank failure in U.S. history after the collapse of Washington Mutual in 2008.

I didn't realize how large SVB was. I'd never heard of it until it collapsed.

> There appeared to be little chance of the chaos spreading in the broader banking sector, as it did in the months leading up to the Great Recession. The biggest banks — those most likely to cause an economic meltdown — have healthy balance sheets and plenty of capital.

https://www.bloomberg.com/news/articles/2023-03-12/us-discusses-fund-to-backstop-deposits-if-more-banks-fail [www bloomberg com]

> The Federal Deposit Insurance Corp. and the Federal Reserve are weighing creating a fund that would allow regulators to backstop more deposits at banks that run into trouble following Silicon Valley Bank's collapse.

> Regulators discussed the new special vehicle in conversations with banking executives, according to people familiar with the matter. The hope is that setting up such a vehicle would reassure depositors and help contain any panic, said the people. They asked not to be identified because the talks weren't public.

So the fears of *contagion* are real.

https://www.bloomberg.com/news/articles/2023-03-10/us-regulators-descend-on-silicon-valley-bank-to-assess-finances [www bloomberg com]

> Watchdogs from the Federal Deposit Insurance Corp. and Federal Reserve are looking into the impact of significant withdrawals, said the people who asked not to be identified discussing the private interactions. Officials at the offices on Thursday sought more insight into the bank's predicament, the people said.

Regulators are trying to determine whether insiders joined in the run on the bank.

https://apnews.com/article/svb-fed-bonds-rates-banks-inflation-a24b28b3caeede91c76cd120aa9b7966 [apnews com]

> Bill Tyler, director of operations for TWG Supply in Grapevine, Texas, said he first realized something was wrong when his employees texted him at 6:30 a.m. Friday to complain that they did not receive their paychecks.

> TWG, which has just 18 employees, had already sent the money for the checks to a payroll services provider that used Silicon Valley Bank. Tyler was scrambling to figure out how to pay his workers.

> "We're waiting on roughly $27,000," he said. "It's already not a timely payment. It's already an uncomfortable position. I don't want to ask any employees, to say, 'Hey, can you wait until mid-next week to get paid?'"

https://apnews.com/article/silicon-valley-bank-bailout-yellen-deposits-failure-94f2185742981daf337c4691bbb9ec1e [apnews com]

> Treasury Secretary Janet Yellen said Sunday that the federal government would not bail out Silicon Valley Bank, but is working to help depositors who are concerned about their money.

> The Federal Deposit Insurance Corporation insures deposits up to $250,000, but many of the companies and wealthy people who used the bank — known for its relationships with technology startups and venture capital — had more than that amount in their account. There are fears that some workers across the country won"t receive their paychecks.

> Yellen, in an interview with CBS' "Face the Nation," provided few details on the government's next steps. But she emphasized that the situation was much different from the financial crisis almost 15 years ago, which led to bank bailouts to protect the industry.

> "We're not going to do that again," she said. "But we are concerned about depositors, and we're focused on trying to meet their needs."

There are lots of companies whose payroll funds were held in SVB, so there is lots of pressure to make those companies whole, even if their deposits exceeded the FDIC insurance limit.
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