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Currently, the Federal Deposit Insurance Corp (FDIC)guarantees deposits of up to $250,000 per person, per bank. More than $9.2 trillion of U.S. bank deposits were uninsured at the end of last year, accounting for more than 40% of all deposits, according to U.S. central bank data. COULD THE GOVERNMENT RAISE THE DEPOSIT INSURANCE LIMIT? Some U.S. lawmakers have said Congress should consider whether a higher federal insurance limit on bank deposits was needed in the wake of the collapse of SVB and Signature Bank. Senator Elizabeth Warren, a Democrat, and Senator Mike Rounds, a Republican, have questioned whether the $250,000 deposit insurance limit is still appropriate.

Some banking groups have urged the Biden administration and the Federal Deposit Insurance Corp (FDIC) to temporarily guarantee all U.S. bank deposits, a move they say will help quell a crisis of confidence after the failure of Silicon Valley Bank (SIVB.O) and Signature Bank (SBNY.O). "I have not considered or discussed anything having to do with blanket insurance or guarantees of deposits," she said. "The failure of a small bank, of a community bank, could likewise trigger a run on other banks," she said. "To the best of my knowledge, we've never seen deposits flee at the pace that they did from Silicon Valley Bank," Yellen said. Yellen said it was "not obvious" that banks would pass those costs on to bank customers.

☆ A real estate investor who grosses more than $100,000 in monthly rental income explains the kind of account he uses that safeguards his money better than an FDIC-insured account would
▼ + stars: | 2023-03-22 | by ( Kathleen Elkins | ) www.businessinsider.com time to read: +4 min

To better protect his cash, an investor bringing in six figures a month uses a "DIF member bank." The Depositors Insurance Fund (DIF) is a private insurance fund that banks can pay for to provide extra insurance to their customers. "The FDIC covers you for the first $250,000, but DIF covers you for anything over that," the real estate investor, who grosses over $100,000 per month from rental income, told Insider. That doesn't mean you have to live in Massachusetts to use a DIF member bank. As the DIF website explains: "Several DIF member banks have branches in neighboring states.

☆ Janet Yellen: Further rescues of depositors could be needed if smaller lenders suffer bank runs
▼ + stars: | 2023-03-21 | by ( Matt Egan | ) edition.cnn.com time to read: +2 min

New York CNN —The federal government could once again come to the rescue of uninsured bank depositors if smaller lenders suffer bank runs like the one that collapsed Silicon Valley Bank, according to prepared remarks from US Treasury Secretary Janet Yellen. And the US banking system remains sound,” Yellen said in the remarks, to be delivered at the American Bankers Association’s Washington DC Summit on Tuesday. “Our intervention was necessary to protect the broader US banking system. Regional bank stocks have been volatile ever since the bank failures, with some lenders such as First Republic experiencing dramatic declines. The industry-led rescue of First Republic, announced last week by some of the biggest US banks, represents a “vote of confidence in our banking system,” Yellen said.

With the collapse of Silicon Valley Bank (SIVB.O) and Signature Bank (SBNY.O) and the U.S. government backstopping all deposits at those firms, here is the state of play of deposit insurance in the United States:WHAT IS THE U.S DEPOSIT INSURANCE LIMIT? Currently, the Federal Deposit Insurance Corp (FDIC)guarantees deposits of up to $250,000 per person, per bank. Any losses to the FDIC's deposit insurance fund will be recovered by a special assessment on banks, the FDIC said. COULD THE GOVERNMENT RAISE THE DEPOSIT INSURANCE LIMIT? Senator Elizabeth Warren, a Democrat, and Senator Mike Rounds, a Republican, have questioned whether the $250,000 deposit insurance limit is still appropriate.

Many of the regional banks have also said that their deposit base has stabilized. "The regional banks have come under pressure because they are less equipped to handle a withdrawal of deposits the way the big banks are," said Mark Chandler, chief market strategist at Bannockburn Global Forex in New York. In a move of solidarity, most of the major banks agreed on Thursday to deposit $30 billion in First Republic. At least four U.S. lawmakers said on Sunday they would consider whether a higher federal insurance limit on bank deposits than the current $250,000 threshold was needed to inspire more confidence in the system. Buffett has yet to prop up any of the regional banks.

☆ New York Community Bancorp unit to buy Signature Bank assets, FDIC says
▼ + stars: | 2023-03-20 | by ( Pete Schroeder | ) www.reuters.com time to read: +1 min

WASHINGTON, March 19 (Reuters) - A subsidiary of New York Community Bancorp (NYCB.N) has entered into an agreement with U.S. regulators to buy deposits and loans from New York-based Signature Bank (SBNY.O), which was closed a week ago. Roughly $60 billion of Signature Bank's loans and $4 billion of its deposits would remain with it in receivership, the agency said. The statement did not refer to the other, Silicon Valley Bank (SVB) , a much larger bank that regulators took over two days before Signature. Signature had $110.36 billion in assets, whereas SVB had $209 billion. Under the arrangement for Signature Bank assets, Flagstar will buy $12.9 billion of loans at a discount of $2.7 billion.

☆ Republicans request Fed and FDIC oversight records for failed Silicon Valley Bank and Signature Bank
▼ + stars: | 2023-03-20 | by ( Christina Wilkie | ) www.cnbc.com time to read: +2 min

The Federal Reserve also created a Bank Term Funding Program aimed at safeguarding institutions affected by the market instability of the bank failures. In the days following the collapse, reports have emerged indicating that Silicon Valley Bank ignored repeated warnings from bank regulators that the bank would be at risk of collapse in the event that interest rates rose quickly. In it, Brown suggested that responsibility for the bank failures lay in part with top executives at the failed banks. Brown also asked the regulators to "identify and close regulatory gaps, shortfalls, or failures by state or federal regulators that contributed to the banks' failures." He did not ask for the names of individual Fed or FDIC officials involved in supervising the banks.

☆ Goldman Sachs cuts GDP forecast because of stress on small banks, which are key to U.S. economy
▼ + stars: | 2023-03-15 | by ( Pia Singh | ) www.cnbc.com time to read: +2 min

Photo illustration, the Silicon Valley Bank logo is visible on a smartphone, with the stock market index in the background on the personal computer on March 14, 2023, in Rome, Italy. Goldman Sachs on Wednesday lowered its 2023 economic growth forecast, citing a pullback in lending from small- and medium-sized banks amid turmoil in the broader financial system. "Small and medium-sized banks play an important role in the US economy," the analysts wrote. "Any lending impact is likely to be concentrated in a subset of small and medium-sized banks." The analysts assume that small banks with a low share of FDIC-covered deposits will reduce new lending by 40% and that other small banks will reduce new lending by 15%, leading to a 2.5% drag on total bank lending.

☆ How 'bailout' became a dirty word
▼ + stars: | 2023-03-15 | by ( Nathaniel Meyersohn | ) edition.cnn.com time to read: +5 min

New York CNN —“Bailout” became a curse word in American politics following the 2008 global financial crisis, fueling backlash among people who felt the risks and potential consequences of capitalism didn’t apply to big corporations or the wealthy. A financial bailout is generally considered to be providing compensation for losses when there was reckless, irresponsible or nefarious behavior at play, he added. “Bailout is a dirty word. The politics of bailoutsBailout politics have returned in response to the Silicon Valley and Signature meltdown. If those depositors are made whole, that would constitute a bailout, he said.

WASHINGTON/SINGAPORE, March 13 (Reuters) - U.S. authorities launched emergency measures on Sunday to shore up confidence in the banking system after the failure of Silicon Valley Bank (SIVB.O) threatened to trigger a broader financial crisis. Silicon Valley Bank (SVB), a mainstay for the startup economy, was a product of the decades-long era of cheap money, with unique risks that made it especially vulnerable. With the Fed poised to continue raising interest rates, investors said the financial system may not be fully out of the woods just yet. Goldman Sachs' analysts said they no longer expect it to raise rates at that meeting, amid the stress in the banking sector. A senior U.S. Treasury official said the actions taken would protect depositors, while providing additional support to the broader banking system, but officials and regulators were continuing to monitor financial system stability.

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.

☆ 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."

☆ Biden says taxpayers won't bail out Silicon Valley Bank and the people responsible for its collapse will be held accountable: 'No one is above the law'
▼ + stars: | 2023-03-13 | by ( Sindhu Sundar | ) www.businessinsider.com time to read: +2 min

Taxpayer funds will not bail out Silicon Valley Bank customers, President Joe Biden said Monday. "If the bank is taken over by FDIC, the people running the bank should not work there anymore," he said. Biden also called for a "full accounting" of the factors that led to SVB's collapse, saying, "in my administration, no one is above the law." A representative for Silicon Valley Bank did not immediately return Insider's emailed request for comment Monday morning. On Sunday, Treasury Secretary Janet Yellen and other federal officials said they moved to protect depositors of both, SVB and Signature Bank, saying that banks would foot the bill.

☆ GOP presidential contenders cast blame for Silicon Valley Bank collapse
▼ + stars: | 2023-03-13 | by ( Kevin Breuninger | ) www.cnbc.com time to read: +5 min

Employees stand outside of the shuttered Silicon Valley Bank (SVB) headquarters on March 10, 2023 in Santa Clara, California. Former President Donald Trump and other 2024 Republican presidential hopefuls spoke out over the weekend on the failure of Silicon Valley Bank , offering early hints of their varied approaches to the markets. Silicon Valley Bank, or SVB, was shuttered by financial regulators last week, marking the largest failure of a banking institution since the 2008 financial crisis. Nikki Haley on Saturday night declared, "taxpayers should absolutely not bail our Silicon Valley Bank." "Now depositors at healthy banks are forced to subsidize Silicon Valley Bank's mismanagement.

☆ 'That's how capitalism works,' Biden says of SVB, Signature Bank investors who lost money in failed banks
▼ + stars: | 2023-03-13 | by ( Emma Kinery | ) www.cnbc.com time to read: +2 min

U.S. President Joe Biden delivers remarks on the banking crisis after the collapse of Silicon Valley Bank (SVB) and Signature Bank, in the Roosevelt Room at the White House in Washington, D.C., U.S. March 13, 2023. WASHINGTON — President Joe Biden sought to assure customers of Silicon Valley Bank and Signature Bank on Monday that their money was safe — insured by the Deposit Insurance Fund — but said investors in the failed banks' securities aren't going to get the same guarantee. "Investors in the banks will not be protected," Biden said Monday in a White House speech. Signature Bank in New York, which was shuttered Sunday over similar systemic contagion fears as SVB, had been a popular funding source for cryptocurrency companies. Instead the money will come from the fees that banks pay into the Deposit Insurance Fund."

☆ Bill Ackman says U.S. did the 'right thing' in protecting SVB depositors. Not everyone agrees
▼ + stars: | 2023-03-13 | by ( Sumathi Bala | ) www.cnbc.com time to read: +2 min

Billionaire investor Bill Ackman said the U.S. government's action to protect depositors after the implosion of Silicon Valley Bank is "not a bailout" and helps restore confidence in the banking system. In his latest tweet on SVB's collapse, the hedge fund investor said the U.S. government did the "right thing." "Importantly, our gov't has sent a message that depositors can trust the banking system." Ackman's comments came after banking regulators announced plans over the weekend to backstop depositors with money at Silicon Valley Bank, which was shut down on Friday after a bank run. He explained in another tweet: "The bailout means depositors will put their money in the riskiest banks and get paid higher interest, as there's no downside risk."

☆ Here's how 'duration risk' came back to bite Silicon Valley Bank and led to its rapid collapse
▼ + stars: | 2023-03-13 | by ( Zev Fima | ) www.cnbc.com time to read: +11 min

One key term is "duration risk" along the yield curve in the bond market. Duration risk in bonds Those Treasury purchases in and of themselves were not the issue at SVB. The problem occurred when depositors came calling for their money and the bank didn't have the cash on hand. This mismatch, which always exists to some extent, is where "duration risk" comes into play. The risk is that the duration of the investments made by the bank doesn't match up with its potential liquidity needs.

☆ Republicans are slamming the bailout of Silicon Valley Bank's customers, saying it's a giveaway to the rich
▼ + stars: | 2023-03-13 | by ( Ayelet Sheffey | Juliana Kaplan | ) www.businessinsider.com time to read: +6 min

Federal regulators bailed out Silicon Valley Bank depositors following its Friday collapse. The joint statement made from the Treasury, Federal Reserve, and FDIC noted that the bailout will not be funded by taxpayers — the FDIC's insurance fund, which stands at about $125 billion, will cover all SVB depositors. "I don't know if making money's now woke," Baker said. "Banks like S.V.B. President Joe Biden referenced the 2018 law in Monday remarks on SVB, saying that "we must reduce the risks of this happening again."

WASHINGTON (Reuters) - The U.S. administration stepped in on Sunday with a series of emergency measures to shore up confidence in the banking system after the failure of Silicon Valley Bank threatened to trigger a broader systemic crisis. “The American people and American businesses can have confidence that their bank deposits will be there when they need them,” Biden said in a statement. Silicon Valley Bank (SVB), a mainstay for the startup economy, was a product of the decades-long era of cheap money, with unique risks that made it especially vulnerable. With the Fed poised to continue raising interest rates, investors said the financial system may not be fully out of the woods just yet. “Going forward, we will work with Congress and the financial regulators to consider additional actions we could take in the future to strengthen the financial system,” the official said.

☆ Regulators close crypto-focused Signature Bank, citing systemic risk
▼ + stars: | 2023-03-12 | by ( Yun Li | ) www.cnbc.com time to read: +2 min

U.S. regulators on Sunday shut down New York-based Signature Bank , a big lender in the crypto industry, in a bid to prevent the spreading banking crisis. The banking regulators said depositors at Signature Bank will have full access to their deposits, a similar move to ensure depositors at the failed Silicon Valley Bank will get their money back. As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer," the regulators said. The regulators shuttered Silicon Valley Bank on Friday and seized its deposits in the largest U.S. banking failure since the 2008 financial crisis — and the second-largest ever. The dramatic moves come just days after the tech-focused institution reported that it was struggling, triggering a run on the bank's deposits.

☆ 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.

☆ Signature Bank shut down by regulators
▼ + stars: | 2023-03-12 | by ( Katherine Tangalakis-Lippert | ) www.businessinsider.com time to read: +4 min

The crypto-friendly Signature Bank was shut down by regulators on Sunday. Signature Bank's closure comes on the heels of Silicon Valley Bank being shuttered on Friday. Signature Bank's closure comes on the heels of the shuttering of Silicon Valley Bank on Friday. Signature Bank has assets of more than $110 billion as of December 31. 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.

☆ US regulators bail out Silicon Valley Bank customers
▼ + stars: | 2023-03-12 | by ( Katherine Tangalakis-Lippert | ) www.businessinsider.com time to read: +6 min

Federal regulators announced that depositors of Silicon Valley Bank will be paid in fullIn a statement released Sunday, the Treasury, Federal Reserve and the FDIC said they would "fully protect" depositors with funds in the bank. No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer." "Still to be determined is the fate of the assets of Silicon Valley Bank. No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer. As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer.

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