Democratic Rep. Jeff Jackson explains the collapse of the Silicon Valley bank
Wall Street rallied on Tuesday as inflation data met expectations and regional bank shares bounced back from Monday’s sharp falls following the collapse of Silicon Valley Bank (SVB).
Six regional financial institutions remain under tight scrutiny, but the response from regulators to protect depositors appears to have covered market concerns.
However, credit rating agency Moody’s cut its outlook for the entire US banking system to negative from stable “to reflect the rapidly deteriorating operating environment.”
Meanwhile, the US Securities and Exchange Commission and the Justice Department have reportedly opened investigations into SVB’s failure and any stock trades taken by management before it was shut down on Friday. A class-action lawsuit has also been filed by investors against the parent company, the CEO and the CFO.
Tim Maiopoulos, SVB’s new CEO, said the bank is open for business again, opening new accounts and making new loans. He was CEO of Fannie Mae, returning it to profitability after the 2008 financial crisis.
Elsewhere, Wall Street expert Robert Kiyosaki, famous for predicting the failure of Lehman Brothers, has pegged Credit Suisse as the next big bank most likely to fail.
Abolishing SVB disrupts disruptors in technology
The collapse of Silicon Valley Bank rattled the tech industry that was the bank’s backbone, leaving shell-shocked entrepreneurs grateful for the government suspension that bailed them out while mourning the loss of a place that served as an intimate innovation club.
Silicon Valley Bank’s collapse upsets tech disruptors
The collapse of Silicon Valley Bank hit the tech industry that was the bank’s backbone, leaving shell-shocked entrepreneurs grateful for the government bailing out their money while mourning the loss of a place that served as an intimate innovation club
Oliver O’ConnellMarch 15, 2023 04:45
BUT New York regulator says Signature Bank shutdown ‘nothing to do with crypto’
New York’s financial regulator dismissed comments from former agent Barney Frank, saying its decision to close Signature Bank “had nothing to do with crypto,” citing what it called a “significant crisis of confidence in the bank’s leadership” that had occurred the weekend. after regulators shut down Silicon Valley Bank.
Mr. Frank is on the board of Signature Bank and was one of the pioneers of the landmark Dodd-Frank law, which was enacted after the 2008 financial crisis to better insulate the banking system from shocks.
“I think part of what happened was that regulators wanted to send a very strong message against crypto,” Mr. Frank told CNBC on Monday. “We became the poster boy for not being insolvent based on fundamentals.”
But the NYDFS denied the claims in a statement Tuesday, saying its decision to close Signature Bank on Sunday and appoint the Federal Deposit Insurance Corp as receiver “was based on the bank’s current condition and ability to operate as a safe and healthy way on Monday.”
“The decisions made over the weekend had nothing to do with crypto. Signature was a traditional commercial bank with a broad range of activities and clients,” said a NYDFS spokesperson.
“DFS has been facilitating well-regulated crypto activities for several years and is a national model for regulating the space,” they said.
The spokesperson added that as withdrawal requests increased over the weekend, Signature Bank failed to provide reliable and consistent data.
Mr Frank said he was surprised the regulator said the decision to close the bank was unrelated to cryptocurrencies.
“I think it was a factor,” he said in an interview. “I’m confused why it closed.”
He added that as far as he knows, bank executives are working to provide data to regulators.
“What we heard from our executives is that the deposit situation had stabilized and they would be taking the capital from the discount window, and I remain convinced that if we had opened on Monday, given the announcements of these two policies, we would have had quite good condition and definitely functional,” he said.
Signature was a commercial bank with private client offices with nine national business segments, including commercial real estate and digital asset banking.
Reported by Reuters
Oliver O’ConnellMarch 15, 2023 03:15
Barney Frank claims Signature Bank was seized to send a message to banks
A regulatory takeover of a New York-based bank was intended to send a message to US banks to stay out of the cryptocurrency business, says a former member of Congress who was on the bank’s board.
Former U.S. Rep. Barney Frank said Monday he believes state officials behind the action were trying to make an example of Signature Bank.
“This was just a way of telling people, ‘We don’t want you in cryptocurrency,'” Frank told The Associated Press in a phone interview.
Oliver O’ConnellMarch 15, 2023 02:45
Voices: Ghosts of 2008 financial crisis loom over Biden’s answer
When President Joe Biden announced Monday that people who had deposited their money at Silicon Valley Bank would get their money back, he stressed that American taxpayers would not be left on the hook.
Likewise, he added that those in charge at the bank should be fired and that Silicon Valley Bank investors will not be made whole, arguing that they took a risk and now have to suffer the losses.
Oliver O’ConnellMarch 15, 2023 01:15
DOJ and SEC to investigate stock sales ahead of Silicon Valley Bank collapse, report says
The Santa Clara, Calif.-based technology and startup-focused lender was seized by regulators on Friday during its deposit run, making it the second-largest bank failure in U.S. history.
It is not unusual for such investigations to occur when major financial institutions or public companies collapse or suffer unexpected losses, but the separate investigations will also look at share sales made by company bosses in the days before the bank failed.
Oliver O’Connell15 March 2023 00:15
Lawmaker’s explanation for Silicon Valley Bank collapse goes viral
A lawmaker has been widely praised for posting a two-and-a-half-minute video on Twitter and TikTok that clearly outlines the plight of Silicon Valley Bank.
At 2 a.m. Monday, he filmed a video for social media explaining how the Silicon Valley Bank crisis began, what was being done about it, and to discourage panic.
Oliver O’ConnellMarch 14, 2023 11:45 p.m
Voices: Silicon Valley’s bank collapse made three things frighteningly clear
It wasn’t Lehman Brothers’ moment, but there are three hard lessons to learn from the past few days, he writes David Callaway.
Oliver O’ConnellMarch 14, 2023 11:15 p.m
Biden says the banking system is “safe” and pledges to hold executives accountable
President Joe Biden has assured Americans that the nation’s banking system is safe after the collapse of a Silicon Valley bank last week and said financial executives will be held accountable.
The president’s actions come after the Treasury Department, the Federal Reserve and the Federal Deposit Insurance Corporation announced Sunday night that Silicon Valley Bank depositors would have access to their money.
Eric Garcia filed this report from Washington, DC, on Monday.
Oliver O’ConnellMarch 14, 2023 10:45 p.m
Jeremy Hunt hails ‘great resilience’ as HSBC rescues UK branch of Silicon Valley Bank
Jeremy Hunt says HSBC’s purchase of Silicon Valley Bank UK is a “very important result” and praised the “great resilience” in the UK financial system. “A sale has been agreed… And that means all those really important companies that had deposits with Silicon Valley Bank UK can access their deposits and access normal banking services from this morning,” the chancellor said . “It is a very important result and no taxpayers’ money has been used. It’s the result of a lot of hard work.” Click here to sign up for our newsletters.
Oliver O’ConnellMarch 14, 2023 10:15 p.m
Recap: Why Did Silicon Valley Bank Collapse?
The collapse of the 16th largest US bank sent ripples through global markets on Monday as governments and businesses scrambled to figure out what the impact would be and how it could be contained.
On Monday, the UK government said HSBC would take over the bank’s UK arm.
But what was SVB, why did it collapse and are other banks at risk? We examine these questions here.
Oliver O’ConnellMarch 14, 2023 9:45 p.m