US government steps in and says people with money deposited at SVB will be able to access their money

The US government has declared that individuals who have funds deposited at SVB will be able to access their money.

#government #steps #people #money #deposited #SVB #access #money

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neuronexmachina

Official joint statement from Treasury/FDIC/Fed: https://home.treasury.gov/news/press-releases/jy1337

>After receiving a recommendation from the boards of the FDIC and the Federal Reserve, and consulting with the President, Secretary Yellen approved actions enabling the FDIC to complete its resolution of Silicon Valley Bank, Santa Clara, California, in a manner that fully protects all depositors. Depositors will have access to all of their money starting Monday, March 13.  No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer.

>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. All depositors of this institution will be made whole.  As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer.

>Shareholders and certain unsecured debtholders will not be protected. Senior management has also been removed. Any losses to the Deposit Insurance Fund to support uninsured depositors will be recovered by a special assessment on banks, as required by law.

>Finally, the Federal Reserve Board on Sunday announced it will make available additional funding to eligible depository institutions to help assure banks have the ability to meet the needs of all their depositors. 

bcp01scu05

This likely prevents a bank run on tech-adjacent regional banks tomorrow morning.

MateoPablo55

FDIC maintains an insurance fund to protect depositors and banks pay the premiums. Depositors are made whole from the proceeds of the insurance fund. Owners of the bank lose their entire investment.
If depositors could lose their money when a bank fails people wouldn’t be willing to keep any money in any bank.

grewapair

FYI the assets of the bank were sufficient to cover about 98% of the deposits, and it wasn’t worth taking down the banking sector to teach people a lesson.

And what lesson would that be: keeping your money in a bank is a stupid move? That would be a disaster for the whole country.

The executives have all been fired (with no severance) and the shareholders and those executives have all lost their investment.

I would be in favor of going further and passing a law that all gains from stock sales by the executives within 6 months of an FDIC takeover are the property of the bank and must be repaid, but good luck getting congress to pass such a law.

not_a_lady_tonight

A lot of companies had their money in SVB – I got a few emails this morning from services I subscribe to announcing flash sales so they could make payroll.

Like the investors – sorry investing is a gamble, and you should know that. But putting your money in a bank should be like putting it in a safe.

MainStreetMoneyMan

Regulators close Signature Bank, second shuttered by feds after SVB disaster

daniel_bran

They should take ceo, cmo, cfo money back from the stock sale prior to crash to pay out depositors too.

bryanhealey

this is a great solution, probably the best we could have hoped for. everyone is made whole, no delays in capital access, and more protection for the rest of banking. solid work from the Fed.

josolomo4

Today: “thanks big government!” Tomorrow:”De-regulate everything!”

teddy78

I don’t get a lot of the comments here. There seems to be a lot of people still upset about the bank bailouts from 2008.

Do you have any idea how bad things would have been if they hadn’t bailed out the banks? It would have made the financial crisis a thousand times worse. The bailouts were fine, it’s really the total lack of prosecution for those who caused all this, that’s the problem.

It was the key lesson from the Great Depression that you cannot just let the banking system collapse.

If they hadn’t stepped in now, a lot of tech companies would have been in a lot of trouble, even failed. Also, a lot of other banks and their customers (read: companies that have employees) were at risk of contagion. This could have been very bad. Glad they did the right thing here.

AngelSparkles

Publicize risk, privatize profit.

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jphamlore

The Fed just bailed out **everyone**. That is the real story. SVB could have been allowed to totally collapse, except the real problem is all of the positions from the ZIRP and pandemic low interest eras. Hedge funds have been lining up targets for months for who would have been vulnerable to induced runs. The Fed had to act immediately to prevent contagion, and they just did it the night they had to do it, now.

https://www.federalreserve.gov/newsevents/pressreleases/monetary20230312a.htm

> The additional funding will be made available through the creation of a new Bank Term Funding Program (BTFP), offering loans of up to one year in length to banks, savings associations, credit unions, and other eligible depository institutions pledging U.S. Treasuries, agency debt and mortgage-backed securities, and other qualifying assets as collateral. **These assets will be valued at par.** The BTFP will be an additional source of liquidity against high-quality securities, eliminating an institution’s need to quickly sell those securities in times of stress.

Remigius

DO NOT FALL FOR CBDC and the removal of cash

TheOracleofTroy

Redditors when college grads ask about student loan forgiveness:

“You signed on the dotted line. Your decision.”

Redditors when billionaires and millionaires lose their piles of gold after they knowingly deposited more money than the FDIC was required to insure:

“But but but it’s different. Agreements don’t apply to the rich”.

Creative1963

That’s great news. As long as it is not taxpayers money.

Be_my

Biden had a plan to reorganize and bolster the USPS by making it a federally regulated/controlled bank for lower income to middle class families. I wonder how that’s coming along?

technicalgrandcanyon

this means they did math of letting it fail vs bailout and cheaper and better to bail out customers

jerrybeck

AND the CEO’s and all other officers of the bank should have to put their money back in as deposits until every depositor receives their funds, and IF there is anything left they can have theirs.

Mcfuzzies

Hours before the FDIC takeover, there was bonuses paid. Where are the criminal charges and clawbacks? FTX.US is still hoarding customer cash.

StinkyElevator

So many people here have no clue how fdic works… our school systems needs a serious overhaul.

yourwaifuslayer

Hell yeah!!! Love seeing government step in to help out all the effected small business and workers

Friggin_Grease

Isn’t there some kind of federal agency that protects your money? Like this isn’t new. This happens all the time, but it’s one of the rare instances where a federal institution actually does such a good job, nobody knows it exists?

Pretty sure that Adam Knows Everything guy did an episode on it from his Netflix show. The show was called “The G Word” there’s an episode on it

JohnyBravo0101

Who is going to responsibility for this collapse from SVB side? Would be good to have a criminal charges.

I don’t think it’s a simple matter of oversight. One of their exec was ex-CFO of Lehman Brothers.

Startups should sue SVB execs who fail to observe prudence.

kevin_ackerman

Interesting how quickly we found money for uninsured deposits but how slow it is to find money for anything else.

mjfnd

How would that work?

Fragrant-Cheek-4952

This makes sense. I’m sure so many startups wouldn’t have made payroll for the next few months, thus putting a ton out of work.

theRealLotzz

Isn’t this a bailout?

Grim-Reality

Why do we love to socialize the loses, privatize the profits…. Socialize both guys it’s how it should be

bubbleslmao1

The assets being sold do not equal what the depositors are owed, someone is taking a loss and you know who that is.

slyiscoming

Let the wire transfers begin.

Catvac-u-um_adnase

How ? If all the money is gone and much of the money wasn’t insured? Insurance capped at $250k and those people had millions in one place.

Blazah

Why am I paying for the bad luck of people who had their money in SVB ?? If my bank goes under the tax payers better save me too.

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