I wonder how widespread the fallout will be. It’s likely high interest rates will “expose” more companies in the coming months.
I had a business account with them, thankfully well below the FDIC limit. Can’t access my account right now and waiting to see how things unfold tomorrow when FDIC said it will start making deposit funds available.
This incident doesn’t appear to be a ringer for wider contagion to me, and seems more like an isolated case of mismanagement.
New York's Signature Bank is now closed. Regional banks seems to be at risk, or regulators are waking up to do their jobs. Curious how far this all goes.
This is the part I find most incredible. How lazy/dumb were these startup depositors who exceeded the FDIC limits. I've worked in the finance department of several organizations and being cognizant of FDIC limits is the most basic principle to adhere to.
It's not that simple. Even small/medium-sized companies have single *transactions* that exceed the FDIC limits.
Of course there are times where you're over the limit. Again, keeping your lifeline in a single bank account is dumb.
I've worked in finance departments for 3 decades. The risk isn't that hard to manage. Sweep accounts, short term treasuries, etc.
California is going bankrupt. How this impacts the rest of the country is yet to be seen, but it doesn’t look good. This is the dot com crash 2.0. Short the NASDAQ.
Signature has 15% of crypto deposits and a lead stable coin sponsor has an account with SIVB. This stablecoin, USD, is now 87 cents on the dollar. Why a bank would mess with these deposits is beyond me. I presume that this 15% will withdraw and SBNY will make forced asset sales to meet redemptions.
Aside from Silvergate, I can't think of another bank of any size that takes crypto.
Another bank that hits the screen is FRC. It is a growth bank and classified a large percentage of assets as held to maturity. If you mark one asset down in the HTM portfolio, they all get reset. They need capital to grow, but can't sell the HTM.
FRC can't sell HTM and take the capital hit. And since they are growth, they are forced to find expensive capital. This was revealed last October, but is coming home to roost now.
New York's Signature Bank is now closed. Regional banks seems to be at risk, or regulators are waking up to do their jobs. Curious how far this all goes.
The larger issue is the Fed is in a box. Can’t raise rates further while inflationary pressures persist. This is what systemic risk looks like. All a function of deranged Government and Fed policies.
The larger issue is the Fed is in a box. Can’t raise rates further while inflationary pressures persist. This is what systemic risk looks like. All a function of deranged Government and Fed policies.
Mostly agreed, but as long as inflation continues to cool it’s not a problem. But suboptimal.
The larger issue is the Fed is in a box. Can’t raise rates further while inflationary pressures persist. This is what systemic risk looks like. All a function of deranged Government and Fed policies.
Amen. Regulation was not the problem. Inflation is the bigger issue. Yellen has been asleep at the wheel while Biden and Pelosi went on a woke spending spree and this is just the tip of the iceberg they created.
The concept of a stablecoin is idiotic. Cryptocurrency is touted as having the advantage of not being under the control of a national government and therefore not subject to the manipulation of central banks and finance ministries. Why would anybody want cryptocurrency that is pegged to the US Dollar ? The value of that cryptocurrency would be subject to manipulations of the USD by the Federal Reserve.
Biden administration caused this crisis with anti-capitalist policies. We are going to become Venezuela 2.0 soon. The whole system will crash and burn thanks to Biden's over-regulation of banking and loans. We will be forced to send our money to deadbeats while our nation's capitalist savers and investors are screwed by the treasury and Biden.
Silicon Valley Bank’s shareholders and executives lose it all, as they should. Depositors in good faith, however, should recover and have access to their deposits in order to meet their payrolls, pay their suppliers, and to prevent contagion.
