Bank Failure: It's not often that a bank fails, but the one in Silicon Valley is making people nervous. I think it's interesting that the government is considering covering the losses...

jerryc41 Loc: Catskill Mts of NY

It's not often that a bank fails, but the one in Silicon Valley is making people nervous. I think it's interesting that the government is considering covering the losses of all depositors. The FDIC guarantees deposits up to $250,000, but in this case, all deposits could be covered. "Leave no millionaire behind."

philo Loc: philo, ca

It was said that 97% were over $250K.

jerryc41 Loc: Catskill Mts of NY

philo wrote:

It was said that 97% were over $250K.

Well, I guess we know what's going to happen.

toxdoc42

You do realize, Lof L, the banking regulations which required a bank maintain a certain liquidity, to prevent a situation like the resent one, was rescinded during the administration of POTUS #45?

RiJoRi Loc: Sandy Ridge, NC

jerryc41 wrote:

Well, I guess we know what's going to happen.

Prices go up even more.
--Rich

Pete D

2nd bank failed now also

rcarol

jerryc41 wrote:

It's not often that a bank fails, but the one in Silicon Valley is making people nervous. I think it's interesting that the government is considering covering the losses of all depositors. The FDIC guarantees deposits up to $250,000, but in this case, all deposits could be covered. "Leave no millionaire behind."

Signature Bank in New York has also been taken over by the Feds and their depositors will also be made whole. Clearly. more than a few politicians had their life savings in one or both of these banks. Really, could you see the government bailing out a small bank in the middle of Iowa's cornfields?

MrBossHK Loc: The West Valley of Phoenix metro area

jerryc41 wrote:

Well, I guess we know what's going to happen.

From viewing the course that the comments are heading, the most likely thing to happen will be this thread getting relocated to the Attic.

pendennis

toxdoc42 wrote:

You do realize, Lof L, the banking regulations which required a bank maintain a certain liquidity, to prevent a situation like the resent one, was rescinded during the administration of POTUS #45?

Remember that bank reserve requirements were reduced during the COVID19 pandemic. It's not unreasonable for reserve requirements to be reduced during times of financial crises (real or perceived).

And just where were the Fed's bank auditors, reviewing the high-risk loans SVB was making?

Shellback Loc: North of Cheyenne Bottoms Wetlands - Kansas

I read an article today that shows how the government insurance works - if you have multiple accounts, each is guaranteed for $250,000.
The FDIC covers:
Checking accounts
Negotiable Order of Withdrawal (NOW) accounts
Savings accounts
Money Market Deposit Accounts (MMDAs)
Time deposits such as certificates of deposit (CDs)
Cashier's checks, money orders, and other official items issued by a bank

The example shown was a couple with bank accounts, cd’s, etc and their coverage added up to $2M
It’s how you play the system…

dwmoar Loc: Oregon, Willamette Valley

Pete D wrote:

2nd bank failed now also

What did you expect from a bank that focused mainly on crypto currency. And poof it is gone

bikinkawboy Loc: north central Missouri

toxdoc42 wrote:

You do realize, Lof L, the banking regulations which required a bank maintain a certain liquidity, to prevent a situation like the resent one, was rescinded during the administration of POTUS #45?

If that’s so, then why didn’t POTUS #46 rescind that? On his first day in office he rescinded the reining in of the EPA the previous president made to the Waters Of The US? The reinstated rules will tell me that I can’t farm a field that has been continually cropped for at least 80 years because it is a wetland, thus under control of the EPA and their muscle, the Army Corps of Engineers. If it is a wetland, how could if have been cropped every single year?

If #45 is guilty of undoing something, then #46 is guilty of not redoing something. Fault on both sides, something you can’t deny. And admit that politicians on both sides are only concerned about themselves and their cronies.

gvarner Loc: Central Oregon Coast

jerryc41 wrote:

It's not often that a bank fails, but the one in Silicon Valley is making people nervous. I think it's interesting that the government is considering covering the losses of all depositors. The FDIC guarantees deposits up to $250,000, but in this case, all deposits could be covered. "Leave no millionaire behind."

The government is not covering those deposits. The FDIC, an independent authority, is using its own authority to cover those deposits, to forgive the sins of the depositors and the bank. Pretty much the same way Jesus had authority to forgive the sins of the sinners. The ancient ones were mystified by this concept of authority and symbolically humanized it in the Triumvirate.

StanMac Loc: Tennessee

My knowledge about banking is quite limited. What does a failed bank mean other than it doesn’t have liquid funds to cover all depositor demands? The bank has, I am sure, billions in outstanding loan receipts, current and future. Could the bank call or sell the loans to meet depositor demands?

Stan

gvarner Loc: Central Oregon Coast

StanMac wrote:

My knowledge about banking is quite limited. What does a failed bank mean other than it doesn’t have liquid funds to cover all depositor demands? The bank has, I am sure, billions in outstanding loan receipts, current and future. Could the bank call or sell the loans to meet depositor demands?

Stan

This bank and a couple associated with it were OK until interest rates started going up. Their model was built on continuing low rates. That was the trigger but beyond that it gets pretty complicated. The fed had oversight until it was removed under 45 thanks to heavy lobbying by this bank's CEO, among others. As I see it, our entire financial system is built on gambling and hoping the house of cards doesn’t collapse.