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☆ SVB: What the worst bank failure since 2008 means for markets, the financial sector, and interest rates
▼ + stars: | 2023-03-14 | by ( Zahra Tayeb | ) www.businessinsider.com time to read: +8 min

Here's what SVB's sudden demise means for markets, the US banking sector, and interest rates. That capped a turbulent week that saw a botched fundraising attempt by Silicon Valley Bank (SVB) and a $1.8 billion loss on its bond holdings, which ultimately triggered an old-fashioned bank run. Silicon Valley Bank's collapse exposed a serious risk many banks face in their business portfolios – the dependence on uninsured deposits. However, former Treasury chief Larry Summers took a less pessimistic view, saying SVB's collapse was "unlikely to be a broadly systemic problem." But as bad as it is, it's unlikely to trigger a repeat of the 2008 global financial crisis that set the stage for the Great Recession, according to analysts.

☆ Private equity giants including Apollo, Blackstone eye SVB loan book- reports
▼ + stars: | 2023-03-14 | by ( ) www.reuters.com time to read: +2 min

[1/2] Customers wait outside as an employee enters the Silicon Valley Bank branch office in downtown San Francisco, California, U.S., March 13, 2023. REUTERS/Kori Suzuki/File PhotoMarch 14 (Reuters) - Apollo Global Management Inc (APO.N), Blackstone Inc (BX.N) and KKR & Co Inc (KKR.N) have expressed interest in a book of loans held by Silicon Valley Bank (SVB), Bloomberg News reported on Tuesday, citing people familiar with the matter. Buyout giants Ares Management (ARES.N) and Carlyle Group (CG.O) are also looking to buy the loan book, the Financial Times reported, citing people familiar with the matter. The surge in interest in the book follows the tech lender's failure last week to raise equity to plug a $1.8 billion hole after selling its $21 billion portfolio of securities at a loss. On Monday, SVB said it was planning to explore strategic alternatives for its businesses, including holding company SVB Capital and SVB Securities.

CNN —Silicon Valley Bank’s astonishing fall Friday began when its customers rushed to draw down their accounts all at once — a destabilizing event known as a bank run. The bank provided financing for almost half of US venture-backed technology and health care companies. It was the largest failure of a US bank since Washington Mutual in 2008, during the Great Recession. Although the bank’s fall unfolded over a rapid 48 hours, the story begins years ago with moves made by the Fed and investment decisions by the bank. Here’s what led to the demise of a Top 20 US commercial bank:

☆ SVB's new CEO urges clients to 'help us rebuild our deposit base'
▼ + stars: | 2023-03-14 | by ( Rohan Goswami | ) www.cnbc.com time to read: +2 min

A view of Silicon Valley Bank headquarters in Santa Clara, CA, after the federal government intervened upon the bankâs collapse, on March 13, 2023. "The number one thing you can do to support the future of this institution is to help us rebuild our deposit base, both by leaving deposits with Silicon Valley Bridge Bank and transferring back deposits that left over the last several days," Mayopoulos wrote. SVB's failure was the second-largest ever for a U.S. bank, behind the 2008 collapse of Washington Mutual. Federal regulators intervened over the weekend, guaranteeing that depositors would not suffer losses as the contagion threated to spread to other banks. The FDIC is only mandated to insure $250,000 worth of deposits per customer.

March 12 (Reuters) - State regulators closed New York-based Signature Bank (SBNY.O) on Sunday, the third largest failure in U.S. banking history, two days after authorities shuttered Silicon Valley Bank (SIVB.O) in a collapse that stranded billions in deposits. All of the depositors of Signature Bank and Silicon Valley Bank will be made whole, and "no losses will be borne by the taxpayer," the U.S. Treasury Department and other bank regulators said in a joint statement. Signature's failure followed Silicon Valley Bank's Friday shutdown, the second largest in U.S. history behind Washington Mutual, which collapsed during the 2008 financial crisis. Signature Bank's depositors and borrowers will automatically become customers of the bridge bank, the FDIC said. Signature Bank cut ties with Trump in 2021 following the deadly Jan. 6 riots on Capitol Hill, and urged Trump to resign.

The U.S. Treasury Department and other bank regulators said in a joint statement on Sunday that all depositors of Signature Bank will be made whole, and "no losses will be borne by the taxpayer." Signature Bank reported deposit balances totaling $89.17 billion as of March 8. Representatives for Signature Bank did not immediately respond to a request for comment. The FDIC on Sunday established a "bridge" successor bank to Signature Bank, which will enable customers to access their funds on Monday. Signature Bank's depositors and borrowers will automatically become customers of the bridge bank, the FDIC said.

☆ Everything you need to know about a crazy weekend in the wake of Silicon Valley Bank's failure
▼ + stars: | 2023-03-13 | by ( Dan Defrancesco | ) www.businessinsider.com time to read: +6 min

It's all about Silicon Valley Bank going down and the knock-on effects. If you're not up to speed, here's a quick rundown on what the hell happened at Silicon Valley Bank. The US Treasury, Federal Reserve Board, and the Financial Deposit Insurance Corporation announced they would "fully protect" all depositors who had funds in Silicon Valley Bank. Regulators also made one thing clear with their announcement: "No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer." Nobel Prize-winning economist Paul Krugman has a new name for Silicon Valley Bank.

☆ Silicon Valley Bank's spectacular implosion shows how digital banking can decimate a lender in 24 hours
▼ + stars: | 2023-03-13 | by ( Hasan Chowdhury | ) www.businessinsider.com time to read: +5 min

Silicon Valley Bank's rapid implosion showed how bank runs can go at warp speed in the digital age. But while digital banking meant SVB's collapse accelerated to warp speed, its foundations had been left shaky. Digital banking, and the expectation of instantaneous transactions, is now the norm for the internet generation. Bianco said SVB's collapse should "scare the hell" out of bankers and regulators worldwide. Nigel Green, CEO of deVere Group, an independent financial adviser, said SVB's collapse had brought Trump-era deregulation into question.

☆ Why Trump is being called out in the Silicon Valley Bank collapse
▼ + stars: | 2023-03-13 | by ( Ayelet Sheffey | ) www.businessinsider.com time to read: +5 min

Some Democrats have been blaming Trump-era regulations for Silicon Valley Bank's collapse. In 2018, Trump signed into law a bill that rolled back provisions in the Dodd-Frank Act and loosened oversight over banks. On Friday, regulators shut down Silicon Valley Bank following a tumultuous few days of failing to raise capital and a flood of customers withdrawing their funds from the bank. "Greg Becker, the chief executive of Silicon Valley Bank, was one of the ‌many high-powered executives who lobbied Congress to weaken the law," Massachusetts Sen. Elizabeth Warren wrote in a Monday opinion piece. Vermont Sen. Bernie Sanders said in a statement that the "failure of Silicon Valley Bank is a direct result of an absurd 2018 bank deregulation bill signed by Donald Trump that I strongly opposed."

☆ Investing in 2023 is 'definitely going to be rocky,' advisor says. How to stay the course
▼ + stars: | 2023-03-13 | by ( Lorie Konish | ) www.cnbc.com time to read: +3 min

In the latest example, the failure of Silicon Valley Bank rattled investors and sent stocks lower on Friday. By midday Monday, the markets had moved upwards, though certain bank stocks were still hurting. "This is going to be a great year, and it's definitely going to be rocky," Francis told CNBC.com in February. Likewise, grim market results in December were followed by some of the best upswings in decades in January. This is going to be a great year, and it's definitely going to be rocky.

☆ Elizabeth Warren criticizes 'overnight' bailout of SVB customers while leaving 'millions of student loan borrowers in limbo'
▼ + stars: | 2023-03-13 | by ( Ayelet Sheffey | ) www.businessinsider.com time to read: +4 min

Sen. Warren criticized SVB customer protections as millions of student-loan borrowers are "in limbo." Borrowers have yet to get broad relief and are waiting for the Supreme Court to rule on the legality of Biden's debt cancellation. Warren has long pushed for stricter oversight over big banks, along with protections for student-loan borrowers. Regulators' protections for SVB customers come as millions of borrowers are waiting for the Supreme Court to decide whether President Joe Biden's plan to cancel up to $20,000 in student debt is legal. It's unclear whether borrowers will end up getting the "bailout" GOP lawmakers oppose, but for now, Warren wants to ensure big banks won't be able to escape regulation.

☆ The Fed needs to stop raising rates now, former FDIC chair says after Silicon Valley Bank failure
▼ + stars: | 2023-03-13 | by ( Matt Egan | ) edition.cnn.com time to read: +3 min

Silicon Valley Bank is second only to Washington Mutual in terms of the biggest bank failures in US history. Those interest rate hikes have contributed to the collapse of Silicon Valley Bank in at least two key ways. First, higher borrowing costs rocked the frothy parts of the US economy, especially the tech industry that Silicon Valley Bank catered to. They panicked, yanking $42 billion last Thursday alone when Silicon Valley Bank’s stock crashed by 60%, according to filings by California regulators. By the close of business that day, Silicon Valley Bank had a negative cash balance of about $958 million.

☆ It's crystal clear now: More banks are going to fail
▼ + stars: | 2023-03-13 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +4 min

It is likely that more bank failures are coming after the collapse of Silicon Valley Bank. "There's no doubt in my mind: There's going to be more. Investors are clearly nervous about the potential for a cascade of bank failures, reflected in the stock price of a handful of regional banks on Monday. Biden, Yellen vow no bailoutsThough depositors have been made whole in both recent failures, banks and their shareholders should be prepared for the government to let them fail, and should not count on anything resembling a 2008-style bailout. "And the reforms have been put in place means that we're not going to do that again."

☆ The Fed says it will investigate its oversight of Silicon Valley Bank following the biggest bank failure since 2008
▼ + stars: | 2023-03-13 | by ( Phil Rosen | ) www.businessinsider.com time to read: +2 min

The Fed will investigate its oversight of Silicon Valley Bank, Chairman Jerome Powell said Monday. "The events surrounding Silicon Valley Bank demand a thorough, transparent, and swift review by the Federal Reserve." SVB became the biggest bank failure since 2008 after regulators closed it Friday. "The events surrounding Silicon Valley Bank demand a thorough, transparent, and swift review by the Federal Reserve," Chairman Jerome Powell said in the statement. "For a $200 billion bank to have no interest rate risk controls is staggering," he said.

☆ Wall Street — not taxpayers — will pay for the SVB and Signature deposit relief plans
▼ + stars: | 2023-03-13 | by ( Christina Wilkie | ) www.cnbc.com time to read: +3 min

WASHINGTON — Plans announced Sunday to fully reimburse deposits made in the collapsed Silicon Valley Bank and the shuttered Signature Bank will rely on Wall Street and large financial institutions — not taxpayers — to foot the bill, Treasury officials said. The DIF currently has over $100 billion in it, a sum the Treasury official said was "more than fully sufficient" to cover SVB and Signature depositors. To that end, federal officials strongly pushed back on the idea that the plans for SVB and Signature constituted a "bailout." Sen. Bernie Sanders, I-Vt., insisted that "If there is a bailout of Silicon Valley Bank, it must be 100 percent financed by Wall Street and large financial institutions." On Sunday afternoon, Treasury approved of plans that would unwind both SVB and Signature Bank, based in New York, "in a manner that fully protects all depositors."

☆ Relax, SVB's implosion is nothing like the 2008 financial crisis, and the economy will be fine
▼ + stars: | 2023-03-13 | by ( Jacob Zinkula | ) www.businessinsider.com time to read: +5 min

But it's not a repeat of the 2008 financial crisis, when the government stepped in to support the US banking system. In recent days, many have drawn comparisons to the 2008 financial crisis, when the federal government doled out roughly $200 billion to hundreds of banks to support the US banking system. The size of SVB's bank failure has only been surpassed once in American history — by Washington Mutual when it collapsed in 2008. While the economy and markets aren't the same thing, a struggling market can be a negative leading indicator for a weakening economy. If the US economy does enter a recession as some experts expect, SVB's failure is unlikely to be the reason why.

☆ Sellers on eBay are trying to auction off Silicon Valley Bank-branded merch, including a cardboard box for $201 and a wine cooler for $42
▼ + stars: | 2023-03-13 | by ( Kate Duffy | ) www.businessinsider.com time to read: +2 min

Items featuring the Silicon Valley Bank logo were put up for auction on eBay over the weekend. They include a cardboard box for $201 and a wine tumbler for $42, per the listings. The items listed on eBay included a blue cardboard box with SVB's logo displayed on the front, which was priced at $201 at time of publication. It was listed on eBay on Saturday and the site showed there were five days left until the auction for the box closed. The seller said in the description they were "two pieces of genuine Silicon Valley Bank corporate swag."

NEW YORK (Reuters) -U.S. authorities were preparing “material action” on Sunday to shore up deposits in Silicon Valley Bank (SVB) and stem any broader financial fallout from its sudden collapse, sources familiar with the matter told Reuters. Biden administration officials worked through the weekend to assess the impact of startup-focused lender SVB Financial Group’s failure on Friday, with a particular eye on the venture capital sector and regional banks, the sources said. REUTERS/Nathan FrandinoAnd amid increased withdrawals from other regional banks, U.S. officials are also keeping close watch on the wider sector. The S&P 500 regional banks index dropped 4.3% on Friday to end the week down 18%, its worst week since 2009. Signature Bank, First Republic Bank, PacWest Bank and Charles Schwab did not immediately respond to requests for comment.

☆ Hundreds of venture capital firms vow to work with Silicon Valley Bank again if new owner is found
▼ + stars: | 2023-03-12 | by ( Lora Kolodny | ) www.cnbc.com time to read: +3 min

More than three hundred venture capital firms have signed a joint statement vowing to do business again with Silicon Valley Bank if it is "purchased and appropriately capitalized," after the financial institution failed on Friday. The SVB failure marks the largest in U.S. banking since the 2008 financial crisis and the second-largest ever. Some venture firms withdrew their own money and instructed their portfolio companies to withdraw their deposits from SVB before the run. The joint statement was shared by many individual venture capitalists on social networks following the bank failure. It said:Silicon Valley Bank has been a trusted and long-time partner to the venture capital industry and our founders.

☆ Cramer to the Fed: You have an elegant fix for the Silicon Valley Bank crisis — please use it
▼ + stars: | 2023-03-12 | by ( Jim Cramer | ) www.cnbc.com time to read: +11 min

ET, where Jim and other experts will discuss the ramifications of Silicon Valley Bank's demise on the economy and the stock market. The who is Silicon Valley Bank. Silicon Valley Bank was not likely to support your company if it did not receive all of your deposits. ET, where Jim and other experts will discuss the ramifications of Silicon Valley Bank's demise on the economy and the stock market. A Brinks armored truck sits parked in front of the shuttered Silicon Valley Bank (SVB) headquarters on March 10, 2023 in Santa Clara, California.

☆ Here's what could happen next for Silicon Valley Bank customers
▼ + stars: | 2023-03-12 | by ( Jesse Pound | ) www.cnbc.com time to read: +4 min

A customer stands outside of a shuttered Silicon Valley Bank (SVB) headquarters on March 10, 2023 in Santa Clara, California. Many investors on Wall Street and in Silicon Valley are anticipating additional information to be announced at some point on Sunday. Evelyn Hockstein | ReutersOne potential option could be to use the FDIC's systemic risk exception tool to backstop the uninsured deposits at SVB. Bloomberg News reported on Saturday night that between 30% and 50% of the uninsured deposits could be returned as soon as Monday. That process could take several weeks or more and end with uninsured deposits being restored at less than 100%.

☆ First Republic says its liquidity remains 'very strong' in bid to calm nerves following Silicon Valley Bank's collapse
▼ + stars: | 2023-03-12 | by ( Ryan Hogg | ) www.businessinsider.com time to read: +5 min

First Republic sought to reassure customers after its share price crashed following SVB's collapse. However, about 68% of the bank's deposits, or almost $120 billion, are not insured. First Republic scrambles to reassure investorsFirst Republic's share price plunged by a third last week as SVB imploded. "First Republic Bank, which has significant exposure to the coastal real estate markets appears to be next on the list." Regulators may step in to create a wider safety net to secure more of struggling banks' deposits, in an attempt to calm jittery customers.

☆ U.S. government steps in and says people with funds deposited at SVB will be able to access their money
▼ + stars: | 2023-03-12 | by ( Jeff Cox | ) www.cnbc.com time to read: +5 min

Those with money at the bank will have full access starting Monday. The Treasury Department designated both SVB and Signature as systemic risks, giving it authority to unwind both institutions in a way that it said "fully protects all depositors." The Fed facility will offer loans of up to one year to banks, saving associations, credit unions and other institutions. The SVB failure was the nation's largest collapse of a financial institution since Washington Mutual went under in 2008. Authorities had spent the weekend looking for a larger institution to buy SVB, but came up short.

☆ Auction process is reportedly underway to find a buyer for Silicon Valley Bank
▼ + stars: | 2023-03-12 | by ( Jesse Pound | ) www.cnbc.com time to read: +1 min

A sign is posted in front of the Silicon Valley Bank (SVB) headquarters on March 10, 2023 in Santa Clara, California. Federal regulators are conducting an auction for Silicon Valley Bank, with final bids due Sunday, according to a report from Bloomberg News. The bank was closed by regulators on Friday after massive withdrawals a day earlier created a bank run. The Federal Deposit Insurance Corporation took control of the bank on Friday, and started an auction process on Saturday night, according to the report. Many investors on Wall Street and Silicon Valley expect an announcement at some point on Sunday to detail the next steps in the SVB crisis.

The Federal Deposit Insurance Corporation (FDIC), which was appointed receiver, was trying to find another bank over the weekend that was willing to merge with Silicon Valley Bank, people familiar with the matter said on Friday. However, it was not clear if regulators would have political support to throw a lifeline to the bank, which catered to Silicon Valley startups and investors. Silicon Valley Bank had an unusually high level of deposits that were not covered by the FDIC's guarantees, which are capped at $250,000. Signature Bank, First Republic Bank, PacWest Bank and Charles Schwab did not immediately respond to requests for comment. "Silicon Valley had a unique business model that was less dependent on retail deposits than a traditional bank."

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