President Trump-endorsed rollback of Dodd-Frank's tougher scrutiny of banks was a significant factor in SVB's problems. But it wasn't the only culprit.
It was a scene straight out of the Great Depression: a major California bank locking its doors and pulling down the shades as a horde of panicky depositors demanded their money.
It’s possible that the feds could raise the current deposit guarantee cap more broadly, as they did during the 2008 financial crash. Still, the Fed’s move over the weekend to provide liquidity support for banks holding safe assets like Treasury bonds should help to limit the spread. And major banks, which were the core of troubles in the 2008 crisis, “are likely to prove more robust this time around,” said analysts at Capital Economics.Not entirely, but it didn’t help.
Sure, the bank was overexposed to a struggling tech industry, but that was compounded by the fact that it had mostly large depositors, which is unusual for a community lender. Absolutely, says Lawrence J. White, an expert on bank management and regulations at New York University. “Bank regulators were asleep at the switch,” he said.
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Bank regulators seize Silicon Valley Bank in largest bank failure since the Great RecessionThe bank failed after depositors — mostly technology workers and venture capital-backed companies — began withdrawing their money creating a run on the bank.
Read more »
Can the Government Contain a Banking Crisis? - The Journal. - WSJ PodcastsWhen Silicon Valley Bank imploded last week, it was the second biggest bank failure in U.S. history. Then, over the weekend, another bank, Signature Bank, was also taken over by the government. WSJ financial editor Charles Forelle explains what kicked off this banking crisis and how the government is scrambling to contain it. Further Reading: - How Silicon Valley Turned on Silicon Valley Bank - Silicon Valley Bank Closed by Regulators, FDIC Takes Control - Were SVB and Signature Bank Just Bailed Out by the U.S. Government?
Read more »
Crypto-friendly Signature Bank shut down by regulators, after collapses of Silicon Valley Bank, SilvergateState authorities closed Signature Bank Sunday, after Silicon Valley Bank was shut down by regulators on Friday in the biggest bank failure since the 2008...
Read more »
U.S. Treasury says Silicon Valley Bank, Signature Bank 'not being bailed out'New policies adopted on Sunday by U.S. banking regulators will 'wipe out' equity and bondholders in Silicon Valley Bank and Signature Bank of New York while protecting all customer deposits, a senior U.S. Treasury official said.
Read more »
Second Bank Shuttered by Regulators After Silicon Valley Bank’s CollapseSignature bank, a titanic figure in the crypto industry, was shut down by New York’s state chartering authority Sunday. It was the second U.S. bank to shutter in the past week.
Read more »
Regulators close New York's Signature Bank following Silicon Valley Bank collapseThe New York Department of Financial Services announced on Sunday that it has taken possession of Signature Bank and appointed the Federal Deposit Insurance Corporation (FDIC) as the bank's receiver.
Read more »