OPINION: Jonathan Stambolis explains why he trusted Silicon Valley Bank with millions of dollars and then why he trusted authorities to get his company out of the mess as the bank melted down.
The Australian Financial Review“My assumption from the beginning has been that the consequences of deposit holders being left out to dry were really unfathomable,” he said. “The details have to be worked out – and quickly – but the case for decisive intervention to make all deposit holders whole is unarguable. The alternative is something no government could countenance.
Extreme fear should recede now the US Fed is saying it will make additional funding available to eligible deposit institutions to help assure banks can meet the needs of all their depositors. This effectively removes the distinction between secured and unsecured depositors and the previous $250,000 limit on insured payments.
of designating both SVB and Signature Bank as systemic risks to the financial system. This allowed them to assure all depositors they would have access to their money from Monday. Showing the political sensitivity of any suggestion of a bailout for the tech or banking industry, the joint statement said no losses would be funded by American taxpayers.
As tech companies found it increasingly difficult to access new funding, they were tapping into deposits at a faster rate than SVB could manage without selling longer-term assets and crystallising losses.for start-ups to deal with than other slower, more bureaucratic banks.
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