The FDIC said in the announcement that insured depositors will have access to their deposits no later than Monday morning.
SVB’s branch offices will also reopen at that time, under the control of the regulator.
The FDIC’s standard insurance covers up to $250,000 per depositor, per bank, for each account ownership category.
Last edited by ContagiousInspiration on Fri Mar 10, 2023 1:01 pm; edited 2 times in total
Joined: 10 Dec 2006 Posts: 51319 Location: Making a safety stop at 15 feet.
Posted: Mon Mar 13, 2023 9:00 am Post subject:
Palin wrote:
So Biden just blamed Trump, only 3 min statement and didn't take questions.
Yeah it seems bad.
Because that administration eliminated many of the regulations intended to prevent this kind of event. _________________ You thought God was an architect, now you know
He’s something like a pipe bomb ready to blow
And everything you built that’s all for show
goes up in flames
In 24 frames
Joined: 07 May 2014 Posts: 12559 Location: Boulder ;)
Posted: Mon Mar 13, 2023 11:27 am Post subject:
From everything I've read they would have survived because their assets/bonds enough to cover everything but not fast enough to cover a run on the bank that wasn't entirely justified and was possibly malicious?
From what I read, they were selling off assets at a loss to cover clients pulling out money.
1) So, it started with clients already withdrawing money:
Quote:
...some Silicon Valley Bank clients started pulling money out to meet their liquidity needs. This culminated in Silicon Valley Bank looking for ways this week to meet its customers' withdrawals.
2) Then on Wednesday, they sold $21B in securities at a $1.8B loss to cover the withdrawals:
Quote:
To fund the redemptions, Silicon Valley Bank sold on Wednesday a $21 billion bond portfolio consisting mostly of U.S. Treasuries. The portfolio was yielding it an average 1.79%, far below the current 10-year Treasury yield of around 3.9%. This forced SVB to recognize a $1.8 billion loss, which it needed to fill through a capital raise.
3) Then on Thursday, they announced they'd raise capital (to cover this loss) by selling shares of equity. This caused their stock to plunge:
Quote:
SVB announced on Thursday it would sell $2.25 billion in common equity and preferred convertible stock to fill its funding hole. Its shares ended trading on the day down 60%, as investors fretted that the deposit withdrawals may push it to raise even more capital.
4) Which lead to the bank run:
Quote:
Some SVB clients pulled their money from the bank on the advice of venture capital firms such as Peter Thiel's Future Fund, Reuters reported. This spooked investors such as General Atlantic that SVB had lined up for the stock sale, and the capital raising effort collapsed late on Thursday.
Is this malicious? I mean, everyone is sitting on unsecured deposits. I don't know how secure clients should feel when others are currently withdrawing and the bank is selling assets at a loss to meet these withdrawals while its stock is dropping by 60%.
I mean, if we're going to blame all those who pulled out on Thursday, why not blame the ones who started pulling out before last week which lead to SVB having to sell $21B in assets at a loss?
If you think about it, $21B is half of $42B. So, there was already a bank run of $21B before Wednesday.
Joined: 07 May 2014 Posts: 12559 Location: Boulder ;)
Posted: Mon Mar 13, 2023 1:07 pm Post subject:
Thank you Very much for all of that. Takes so many levels of research to get past the fud propaganda. Doesn't look malicious with all the data you provided. Thanks again.
If I saw my bank trying to cover debts by throwing away a billion dollars I'd pull it all out too
Joined: 26 Apr 2004 Posts: 16618 Location: In a no-ship
Posted: Mon Mar 13, 2023 2:02 pm Post subject:
The whole thing goes back to all of the free money the Fed injected into the economy in early covid, the bank needing to do something with their deposits quadrupling during that timeframe, and then being in a really bad situation when the fed raised the interest rate. This was a Fed-created problem, and I'm glad it got solved before impacting the greater economy.
However, now that the FDIC is essentially saying it'll guarantee all deposits, there needs to be more regulations around what banks are allowed to invest deposits in. Should be like treasury bills only, or something similar?
^ I heard the bonuses were scheduled for that day. It wasn't a last minute decision.
Quote:
The Santa Clara, California-based bank has historically paid employee bonuses on the second Friday of March, said the people, who declined to be identified speaking about the awards. The payments were for work done in 2022 and had been in process days before the bank’s collapse, the sources said.
I think it's nothing shady going on as far as the bonuses.
Friday Mar 10 happened to be the 2nd Friday of March. Such a coincidence, but it lines up with what they've done in the past (if what they're saying is true).
^ I heard the bonuses were scheduled for that day. It wasn't a last minute decision.
Quote:
The Santa Clara, California-based bank has historically paid employee bonuses on the second Friday of March, said the people, who declined to be identified speaking about the awards. The payments were for work done in 2022 and had been in process days before the bank’s collapse, the sources said.
I think it's nothing shady going on as far as the bonuses.
Friday Mar 10 happened to be the 2nd Friday of March. Such a coincidence, but it lines up with what they've done in the past (if what they're saying is true).
Yep.
There's absolutely ZERO rationale for the employees to not receive the bonuses that were due to them. Granted the timing made the optics look poorly but that's irrelevant. Just feels like another "a-ha! Gotcha" moment from the peanut gallery. _________________ KOBE
(Katie Porter Blames Bipartisan Deregulation For Silicon Valley Bank Turmoil)
Quote:
Katie Porter posts a video to Twitter Explaining how Republican and Democratic members of Congress who helped passed rollbacks of Dodd-Frank regulations are responsible for the turmoil at the Silicon Valley Bank.
(LA Times columnist on the hypocrisy of Silicon Valley ‘libertarians’)
Quote:
The Los Angeles Times’ business columnist Michael Hiltzik joins MSNBC’s Lawrence O’Donnell to discuss the lessons we can learn from the recent bank failures and why the same people who are against student debt relief are now asking the government to “save them.”
You cannot post new topics in this forum You cannot reply to topics in this forum You cannot edit your posts in this forum You cannot delete your posts in this forum You cannot vote in polls in this forum
