Democrat Representative Jeff Jackson explains the collapse of Silicon Valley Bank
Inflation data met expectations and the regional bank’s shares jumped on Tuesday, prompting a jump on Wall Street after Monday’s sharp decline following the collapse of Silicon Valley Bank (SVB).
Six regional financial institutions are under intense scrutiny, but regulators’ response to protect depositors has allayed market concerns.
Nevertheless, credit rating firm Moody’s lowered its outlook for the entire US banking system from stable to negative “to reflect a sharp deterioration in the operating environment”.
Meanwhile, the US Securities and Exchange Commission and Justice Department have reportedly launched investigations into the failure of SVB and any stock trading done by management in the run-up to its shuttering on Friday. A class-action lawsuit has also been filed by investors against the parent company, CEO and CFO.
SVB’s newly appointed CEO Tim Myopoulos has announced that the bank is open for business again, opening new accounts and making new loans. He worked as CEO of Fannie Mae to return 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 major bank likely to collapse.
SVB’s demise creates tech disruption
The collapse of the Silicon Valley bank rattled the technology industry that was the bank’s backbone, leaving shell-shocked entrepreneurs grateful to the government for saving their money, while they mourn the loss of a place that thrived on innovation. functioned as a chummy club.
The closure of a Silicon Valley bank caused disruption in the tech sector.
The collapse of the Silicon Valley bank rattled the technology industry that was the backbone of the bank, leaving shell-shocked entrepreneurs grateful to the government for saving their money, while they mourn the loss of a place that Served as a good club of innovation.
oliver o’connell15 March 2023 04:45
But New York regulator says Signature Bank has ‘nothing to do with crypto’
New York’s financial regulator has emphasized comments from former Rep. a significant crisis of confidence” that occurred over the weekend. After regulators shut down Silicon Valley Bank.
Mr. Frank is a board member of Signature Bank and was one of the pioneers of the landmark Dodd-Frank Act, which was enacted to protect the banking system from shocks after the 2008 financial crisis.
“I think part of what happened was that regulators wanted to send a very strong anti-crypto message,” Mr. Frank told CNBC on Monday. “We became the poster boy because there was no bankruptcy based on fundamentals.”
But the NYDFS refuted their claims in a statement Tuesday, saying Sunday’s decision to close Signature Bank and appoint the Federal Deposit Insurance Corp. as receiver was based on “the current condition of the bank and the need to conduct a safe and secure business.” was based on the ability of Monday in a sound manner.
“The decisions made over the weekend had nothing to do with cryptocurrency. Signature was a traditional commercial bank with a wide range of activities and clients,” said a NYDFS spokesperson.
“DFS has been facilitating well-regulated crypto activities for many years, and is a national model for regulating the space,” he said.
The spokesperson added that due to an increase in withdrawal requests over the weekend, Signature Bank failed to provide reliable and consistent data.
Mr Frank said he was surprised that the regulator said the decision to close the bank was not related to cryptocurrencies.
“I think it was a factor,” he said in an interview. “I wonder why it was closed.”
He said that as per his information, bank officials were working to provide the data to the regulators.
“What we have heard from our officials is that the deposit position has stabilized and they would be getting capital through the discount window and I am confident that if we had opened those two policy announcements on Monday, we would have been reasonably In good shape and definitely functional,” he said.
Signature was a commercial bank with private client offices, with nine national business lines including commercial real estate and digital asset banking.
With reporting from Reuters
oliver o’connell15 March 2023 03:15
Barney Frank claims to have seized Signature Bank to send a message to banks
A former member of Congress who was on the bank’s board says the regulatory takeover of the New York-based bank was intended to send a message to US banks to stay away from the cryptocurrency business.
Former US Representative Barney Frank said Monday that he believed state officials behind the action were trying to make an example of Signature Bank.
“It was a way of telling people, ‘We don’t want you dealing with crypto,'” Frank told The Associated Press in a telephone interview.
oliver o’connell15 March 2023 02:45
Voices: The ghost of the 2008 financial crisis hangs over Biden’s response
When President Joe Biden announced Monday that people who deposited their money at the now-dissolved Silicon Valley bank would have access to their money, he stressed that American taxpayers would not be left on the hook.
Similarly, he said that those responsible at the bank should be fired and that investors in Silicon Valley Bank would not be made whole, arguing that they took the risk and would now have to bear the loss.
oliver o’connell15 March 2023 01:15
DOJ and SEC will investigate stock sale before Silicon Valley Bank collapse, report says
The tech and start-up-focused lender based in Santa Clara, California was taken over by regulators on Friday during a run on its deposits, making it the second biggest bank failure in US history.
It is not unusual for such investigations to occur when large financial institutions or public companies collapse or suffer unexpected losses, but separate investigations will also look at stock sales that company owners made in the days before the bank failed. Was.
oliver o’connell15 March 2023 00:15
Lawmaker’s explanation of Silicon Valley Bank collapse goes viral
A Congressman has been widely praised for posting a two-and-a-half-minute video on Twitter and TikTok clearly outlining the position 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 how to ease the panic.
oliver o’connell14 March 2023 23:45
Voices: The collapse of Silicon Valley Bank made three things terrifyingly clear
It wasn’t a Lehman Brothers moment, but there are three hard lessons to be learned from the past few days, writes david callaway,
oliver o’connell14 March 2023 23:15
Biden says banking system is ‘safe’ and pledges accountability for officials
President Joe Biden reassured Americans that the country’s banking system is safe after the collapse of Silicon Valley Bank last week and said there would be accountability for financial officials.
The president’s action comes after the Treasury Department, the Federal Reserve and the Federal Deposit Insurance Corporation announced on Sunday evening that Silicon Valley bank depositors will have access to their money.
Eric Garcia This report was filed from Washington, DC on Monday.
oliver o’connell14 March 2023 22:45
Jeremy Hunt hails ‘great resilience’ as HSBC rescues Silicon Valley bank UK branch
Jeremy Hunt says the purchase of Silicon Valley Bank UK by HSBC is a “very important result” and praised the “great resilience” in the UK financial system. “A sale has been agreed … and this means that all significant companies that had deposits with Silicon Valley Bank UK can access their deposits as of this morning and use normal banking services.” Can,” the chancellor said. “This is a very significant result and no taxpayer money has been used. It is the result of a lot of hard work.” Click here to sign up for our newsletters.
oliver o’connell14 March 2023 22:15
Recap: Why Did Silicon Valley Bank Collapse?
The shutdown of the 16th largest bank in the US rattled global markets on Monday, as governments and businesses scrambled to figure out what the impact would be and how to contain it.
On Monday the UK government said HSBC would take over the UK wing of the bank.
But what was SVB, why did it collapse, and are other banks at risk? We examine these questions here.
oliver o’connell14 March 2023 21:45