Silicon Valley Bank – Bitfinance

First-Citizens Bank buys failed Silicon Valley Bank

Marilin Pino — Tue, 28 Mar 2023 18:00:26 +0000

First-Citizens Bank & Trust Company has reached an agreement for the acquisition of all the deposits and loans of Silicon Valley Bridge Bank, the entity created by the Federal Deposit Insurance Corporation (FDIC) of the United States, after the intervention of the Silicon Valley Bank (SVB) on March 10.

The FDIC estimates that the cost of Silicon Valley Bank’s bankruptcy for its Deposit Insurance Fund (DIF) amounts to about 20,000 million dollars (18,582 million euros), although the final figure will be determined when the judicial administration ends.

The agreement with First-Citizens Bank entails the purchase of assets for an amount of approximately 72,000 million dollars (66,897 million euros) from Silicon Valley Bridge Bank, with a discount of 16,500 million dollars (15,330 million euros), while around of 90,000 million dollars (83,621 million euros) in securities and other assets will remain under receivership for disposal by the FDIC.

In addition, the FDIC has received rights to common shares of First Citizens BancShares, with a potential value of up to 500 million dollars (465 million euros). In this way, the 17 branches of Silicon Valley Bridge Bank did open this Monday as offices of the First-Citizens Bank & Trust Company. Transactions will be carried out as usual, in the current branches, until the conversion of the systems is officially notified.

Source: dpa

(Reference image source: Mariia Shalabaieva, Unsplash)

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US Federal Reserve admits surprise at Silicon Valley Bank collapse

Krystian Tovar — Thu, 23 Mar 2023 14:00:59 +0000

The US Federal Reserve admitted its surprise at the sudden collapse of Silicon Valley Bank, which was under its watch.

Fed Chairman Jerome Powell told a news conference after the Federal Open Market Committee meeting that he immediately ordered an internal investigation upon learning of the bank’s closure on March 10.

The internal investigation is being led by Vice President Michael Barr and focuses on the Fed’s supervision and regulation of the bank.

Powell confirmed that Barr will testify next week, and his goal is to identify what went wrong in the supervision of the bank. The collapse of the SVB has been linked to successive rate hikes by the Fed to control inflation, which eroded long-term SVB bonds bought at rates close to zero.

The announcement of the loss of 1,800 million dollars after taxes and the need to raise 2,250 million caused a collapse of 160,000 million in the market capitalization of the SVB in 24 hours.

K. Tovar

Source: La Tercera

(Reference image source: file)

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The US will extend protection to banks in the face of the financial situation

Krystian Tovar — Tue, 21 Mar 2023 13:30:18 +0000

The United States Secretary of the Treasury, Janet Yellen, is considering expanding the protection of depositors from other small entities under conditions similar to those of the intervention of Silicon Valley Bank (SVB) and Signature Bank, when the guarantee was increased to 100 % of amounts deposited, against the limit of $250,000.

“The steps we took were not focused on helping specific banks or classes of banks. Our intervention was necessary to protect the American banking system in general,” Yellen said in remarks prepared for her address to the American Bankers Association.

In this sense, for the head of the United States Treasury, “similar actions could be justified if the smallest entities suffer deposit leaks that pose a risk of contagion”.

The SVB was intervened on March 10 by the US financial authorities and that weekend the Treasury Department ordered the Federal Deposit Insurance Corporation (FDIC) to guarantee the funds of the entity’s clients even above the insured limit of $250,000.

K. Tovar

Source: Gestion

(Reference image source: file)

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Sharon Stone claims she lost half her fortune to SVB bankruptcy

Marilin Pino — Tue, 21 Mar 2023 12:00:08 +0000

The bankruptcy of Silicon Valley Bank affects not only empires in the technology sector. Actress Sharon Stone claimed at a charity event on Thursday that half of her fortune was trapped in SVB.

During a fundraiser for cancer and HIV patients, Stone showed her shock at the loss of her money due to the failure of Silicon Valley Bank. She was totally emotional, and indicated that in these difficult times, more courage is required to make donations.

A piece of information provided by the Daily Mail indicates that the fortune of the actress would be around 61 million dollars. This is a considerable loss in her coffers.

The banking crisis in the United States is already sweeping through Europe and Asia, causing greater vulnerability on the global stage and nervousness among investors and savers.

M.Pine

With information from national and international media

(Reference image source: Ringo Chiu/SOPA Images via ZUMA Press Wire/dpa)

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Circle reserves trapped in Silicon Valley Bank

Marilin Pino — Mon, 13 Mar 2023 20:11:25 +0000

The same day that Silicon Valley Bank was intervened due to liquidity problems, the cryptocurrency issuing company Circle announced that USD 3.3 billion of its reserves are withheld in the entity.

The company confirmed the news through its account on the social network Twitter, adding that the sum corresponds to approximately USD 40,000 million.

Faced with the bankruptcy of Silicon Valley Bank, Circle finds its hands tied before any procedure and must wait for the action of the regulators to find out the mechanisms for recovering its money.

Circle’s statement on Twitter reads: “Like other customers and depositors who have trusted SVB to use their banking services, Circle joins calls for continuity of this major bank in the US economy and will continue to guidance provided by state and federal regulators.”

It will be necessary to wait as long as the US authorities and regulators estimate in this matter to learn the details related to the crypto company’s retained reserves, which amount to USD 3.3 billion.

M.Pino

Source: morocotacoin

(Reference image source: social networks)

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Biden assures that the US banking system is safe

Krystian Tovar — Mon, 13 Mar 2023 17:30:15 +0000

US President Joe Biden sent a reassuring message to the country’s population about the safety of the US banking system. In a brief speech to the media, the president stressed that customer deposits at Silicon Valley Bank and Signature Bank are insured and will be available when needed.

This comes after regulators announced a plan to protect the SVB’s deposits after its collapse and the closure of another bank, Signature Bank, under the same parameters.

Biden indicated that he will seek to advance stronger regulation to avoid future bank failures, and affirmed that the money to protect deposits will come from the fees that banks pay for deposit insurance. In addition, the president announced that shareholders will not be protected in the event that the Federal Deposit Insurance Corporation (FDIC) takes over the bank.

In this sense, Biden declared that investors take a risk knowing that they can lose their money, which is a characteristic of capitalism.

California-based Silicon Valley Bank had previously announced it would seek a capital increase to deal with financial difficulties that led it to divest about $21 billion worth of investments, resulting in a loss of about $1.8 billion. millions.

However, many clients withdrew their funds following this announcement, leading to the bank’s lack of liquidity and its subsequent closure by regulators. This caused a drop in the company’s stock price and affected the banking sector not only in the United States, but also in other countries.

K. Tovar

Source: Descifrado

(Reference image source: file)

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US government intervenes in Silicon Valley Bank

Marilin Pino — Mon, 13 Mar 2023 12:00:54 +0000

The Federal Deposit Insurance Corporation (CFSD) intervened this Friday in Silicon Valley Bank (SVB), a financial institution that concentrates a large number of clients among technological ‘startups’.

Customer withdrawals due to rumors about the bank’s solvency problems caused the entity to collapse, which was finally intervened by the California Department of Financial Protection and Innovation, which has culminated in the closure and subsequent assignment of the CFSD as custodian of the deposits.

According to the custodian entity, “deposits of less than 250,000 dollars (234,679 euros) are protected and will be accessible this Monday morning. Regarding figures greater than this amount, clients were advised to contact the agency as soon as possible.

Silicon Valley Group shares on the stock market plummeted 60 %. On the other hand, it is speculated that the SVB would be in negotiations for its sale, after several attempts to raise capital.

While in the United States they remain in expectation regarding the consequences of this intervention, the Bank of the United Kingdom issued an insolvency order on Saturday for the SVB’s subsidiary in the country, and to be able to guarantee its clients the collection of funds until the limit established by the authorities.

M.Pine

With information from international agencies and media

(Reference image source: Alexander Grey, Unsplash)

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