Silicon Valley Bank collapses in second-biggest US bank failure ever

Silicon Valley Bank collapses in second-biggest US bank failure ever
Oliver O'Connell |The Independent
Fri, March 10, 2023 at 10:33 AM MST·1 min read

Regulators took over California-based Silicon Valley Bank on Friday in the second-biggest bank failure in US history.

The Santa Clara-headquartered bank was shuttered by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation (FDIC) as the receiver.

This is the biggest bank collapse in the US since the 2008 failure of Washington Mutual during the global financial crisis.

Shares of the bank were halted on Friday after they tumbled 66 per cent in premarket trading.

The bank is the first FDIC-insured bank to fail in more than two years, the last being Almena State Bank in October 2020.

Silicon Valley Bank had approximately $209bn in total assets and about $175.4bn in total deposits, as of 31 December 2022. Washington Mutual has total assets of $307bn when it was shuttered on 25 September 2008, 10 days after Lehman Brothers failed.

The main office and all branches of Silicon Valley Bank will reopen on March 13 and all insured depositors will have full access to their insured deposits no later than Monday morning, according to a statement.

The startup-focused lender had 17 branches in California and Massachusetts, the FDIC said.

ChatGPT on bank collapse
« on: Today at 01:37:09 pm »

How long will the FDIC take to liquidate a banks assets and repay depositors?

The time it takes for the FDIC to liquidate a failed bank's assets and repay depositors can vary depending on several factors, such as the size and complexity of the bank, the condition of its assets, and the number of depositors affected.

In general, the FDIC aims to complete the process as quickly as possible while also maximizing the value of the bank's assets. Typically, the FDIC will try to find a buyer for the failed bank, either in part or in whole, as this can be the fastest way to recover the assets and repay depositors.

If a buyer cannot be found, the FDIC will take over the bank's operations and begin the process of liquidating its assets, which can take several months or even years. During this time, the FDIC will work to repay depositors up to the insured limit.

The FDIC has stated that its goal is to make insured deposits available to depositors within one business day after a bank failure. In practice, the actual timeline can vary depending on the complexity of the situation and the number of depositors affected. In some cases, it may take several days or even weeks for depositors to regain access to their funds.

It's important to note that the FDIC's ability to repay depositors is dependent on the availability of funds in the Deposit Insurance Fund (DIF), which is funded by premiums paid by member banks. If the DIF becomes depleted, it may take longer for the FDIC to repay depositors, and some depositors may not receive full payment for their insured deposits.

Silicon Valley Bank calls COPS on investors trying to pull their cash.
« on: Today at 01:27:38 pm »

https://www.dailymail.co.uk/news/article-11845495/Silicon-Valley-Bank-branch-calls-NYPD-tech-investors-tried-pull-cash.html

This has really screwed up the market today but I think it will bounce back soon.

BREAKING: Another Bank Has Been Closed By Regulators As Financial Meltdown Continues
By Clayton Keirns, March 12, 2023
Just days after the collapse of Silicon Valley Bank, State Authorities have closed down Signature Bank, citing “systemic risk”. According to reports, shareholders and debtholders will not be protected.

Here’s what we know:



Here is the joint statement by the Department of the Treasury, Federal Reserve, and FDIC:

Today we are taking decisive actions to protect the U.S. economy by strengthening public confidence in our banking system. This step will ensure that the U.S. banking system continues to perform its vital roles of protecting deposits and providing access to credit to households and businesses in a manner that promotes strong and sustainable economic growth.

After receiving a recommendation from the boards of the FDIC and the Federal Reserve, and consulting with the President, Secretary Yellen approved actions enabling the FDIC to complete its resolution of Silicon Valley Bank, Santa Clara, California, in a manner that fully protects all depositors. Depositors will have access to all of their money starting Monday, March 13. No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer.

We are also announcing a similar systemic risk exception for Signature Bank, New York, New York, which was closed today by its state chartering authority. All depositors of this institution will be made whole. As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer.

Shareholders and certain unsecured debtholders will not be protected. Senior management has also been removed. Any losses to the Deposit Insurance Fund to support uninsured depositors will be recovered by a special assessment on banks, as required by law.

Here’s the latest from Twitter:







The Federal Reserve claims the banking system is “resilient”:



This is still a developing story. Stay tuned for more…