[US] Silicon Valley Bank collapse and the wider implications

President Joe Biden has addressed the American people regarding the collapse of Silicon Valley Bank, as the US government takes steps to forestall an escalating financial crisis, Yahoo reports.

This morning (March 13), the president said that “no losses will be borne by the taxpayers. Instead, the money will come from the fees that banks pay into the Deposit Insurance Fund.

“The management of these banks will be fired. If the bank is taken over by FDIC, the people running the bank should not work there anymore.”

He added that “investors in the banks will not be protected”.

“They knowingly took a risk. And when the risk didn’t pay off, investors lose their money. That’s how capitalism works.

“I’m going to ask Congress and the banking regulators to strengthen the rules for banks, to make it less likely this kind of bank failure would happen again,” Mr Biden said. “And to protect American jobs and small businesses.”

“Your deposits will be there when you need them. Small businesses across the country that have deposit accounts at these banks can breathe easier knowing they’ll be able to pay their workers and pay their bills.”

The New York State Department of Financial Services has also reportedly taken over Signature Bank following the second- and third-largest bank failures in US history. Stocks fell today as investors scrambled to find a safe place for their money.

The plan announced by the US government late last night was intended to shore up the banking industry following the collapses of both Silicon Valley Bank and Signature Bank since Friday.

The most significant pressure now is reportedly on regional banks one or two steps below the scale of the mammoth, “too-big-to-fail” banks that helped sink the economy during the 2008 financial crisis. 

Shares of First Republic plummeted by 66.9 per cent, even after confirmation from the bank yesterday that it had strengthened its finances with cash from the Federal Reserve and JPMorgan Chase.

Source: Yahoo

(Links and quotes via original reporting)

President Joe Biden has addressed the American people regarding the collapse of Silicon Valley Bank, as the US government takes steps to forestall an escalating financial crisis, Yahoo reports.

This morning (March 13), the president said that “no losses will be borne by the taxpayers. Instead, the money will come from the fees that banks pay into the Deposit Insurance Fund.

“The management of these banks will be fired. If the bank is taken over by FDIC, the people running the bank should not work there anymore.”

He added that “investors in the banks will not be protected”.

“They knowingly took a risk. And when the risk didn’t pay off, investors lose their money. That’s how capitalism works.

“I’m going to ask Congress and the banking regulators to strengthen the rules for banks, to make it less likely this kind of bank failure would happen again,” Mr Biden said. “And to protect American jobs and small businesses.”

“Your deposits will be there when you need them. Small businesses across the country that have deposit accounts at these banks can breathe easier knowing they’ll be able to pay their workers and pay their bills.”

The New York State Department of Financial Services has also reportedly taken over Signature Bank following the second- and third-largest bank failures in US history. Stocks fell today as investors scrambled to find a safe place for their money.

The plan announced by the US government late last night was intended to shore up the banking industry following the collapses of both Silicon Valley Bank and Signature Bank since Friday.

The most significant pressure now is reportedly on regional banks one or two steps below the scale of the mammoth, “too-big-to-fail” banks that helped sink the economy during the 2008 financial crisis. 

Shares of First Republic plummeted by 66.9 per cent, even after confirmation from the bank yesterday that it had strengthened its finances with cash from the Federal Reserve and JPMorgan Chase.

Source: Yahoo

(Links and quotes via original reporting)