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Washington, US President Joe Biden has assured the American people and businesses that a resolution of the collapse of the <keyword id="630197" type="General" weightage="80" keywordseo="silicon-valley-bank" source="Orion">Silicon Valley Bank</keyword> will not put taxpayer's money at risk, and they can have confidence that their bank deposits would be there when they need it. In a late-night statement on Sunday, Biden also announced that on Monday morning he will deliver remarks on how the US will maintain a resilient banking system to protect the economic recovery. The California-based Silicon Valley Bank (SVB), the 16th largest bank in the United States, was closed on Friday by the California Department of Financial Protection and Innovation which later appointed the Federal Deposit Insurance Corporation (FDIC) as its receiver. Industry watchers expect a quick takeover of the bank as it has enough assets that can be liquidated to return money to the clients. Biden said that at his direction the Treasury Secretary and National Economic Council Director worked diligently with the banking regulators to address problems at SVB and Signature Bank. "I am pleased that they reached a prompt solution that protects American workers and small businesses, and keeps our financial system safe. The solution also ensures that taxpayer dollars are not put at risk. The American people and American businesses can have confidence that their bank deposits will be there when they need them," Biden said. "I am firmly committed to holding those responsible for this mess fully accountable and to continuing our efforts to strengthen oversight and regulation of larger banks so that we are not in this position again," he added. Hours earlier, Treasury Secretary Janet 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 SVB will be borne by the taxpayer," said a joint statement issued by the Department of the Treasury, Federal Reserve, and FDIC. "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 SVB, no losses will be borne by the taxpayer," it said. According to the interagency federal statement, shareholders and certain unsecured debt holders 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," it said. The Federal Reserve Board on Sunday announced it would make available additional funding to eligible depository institutions to help assure banks have the ability to meet the needs of all their depositors. This step will ensure that the US banking system continues to perform its vital roles of protecting deposits and providing access to credit to households and businesses in a manner that promotes strong and sustainable economic growth, the statement further said. Senator Mark Warner, a member of the Senate Banking Committee, said after an unprecedented and reckless run on Silicon Valley Bank, there were very real risks of instability spreading to other institutions and undermining our national security and technology innovation ecosystem. "The Federal Reserve, the FDIC, and the Treasury Department have together acted as Congress intended when we wrote Dodd-Frank by acting swiftly and responsibly to protect depositors and make sure that our financial system remains stable, while at the same time making clear that bank shareholders and bondholders shouldn't expect any kind of bailout by the taxpayers. Their quick action will help companies make payroll and preserve jobs all across the country," he said. California Governor Gavin Newsom said that the Biden Administration has acted swiftly and decisively to protect the American economy and strengthen public confidence in our banking system. "Their actions this weekend have calmed nerves, and had profoundly positive impacts on California - on our small businesses that can now make payroll, workers who will get their paychecks, on affordable housing projects that can continue construction, and on non-profits that can keep their doors open tomorrow," he said. "California is a pillar of the American economy, and federal leaders did the right thing, ensuring our innovation economy can continue to grow and move forward," Newsom said. Silicon Valley Bank was deeply entrenched in the tech startup scene and the default bank for many high-flying startups; its abrupt fall marks one of the largest bank failures since the 2008 global financial crisis. The bank failed after clients -- many of them venture capital firms and VC-backed companies that the bank had cultivated over time -- began pulling out their deposits, creating a run on the bank (among the biggest US bank runs in more than a decade). Bank runs occur when customers or investors gripped by panic start withdrawing their money, causing the bank to be incapable of paying its obligations as they come due. Silicon Valley Bank's abrupt collapse last week has left Silicon Valley entrepreneurs unnerved and jittery. Federal Deposit Insurance Corporation on Friday seized the assets of Silicon Valley Bank -- the action reportedly in the middle of the business day highlighted the severity of the situation.

SVB solution ensures taxpayer dollars are not put at risk: President Biden

As the collapse of <keyword id="630197" type="General" weightage="50" keywordseo="silicon-valley-bank" source="Orion">Silicon Valley Bank</keyword> (<keyword id="675965" type="General" weightage="100" keywordseo="svb" source="Orion">SVB</keyword>) in the US left the Indian startup ecosystem worried, Union Minister of State for Electronics and IT, <keyword id="205969" type="General" weightage="50" keywordseo="rajeev-chandrasekhar" source="Orion">Rajeev Chandrasekhar</keyword>, on Sunday said he will hold a meeting with the startup Founders and CEOs next week to see how the government can help them during the crisis. The bank's collapse is going to impact several startups in India which have exposure to its investments and have parked their funds in the bank. "The @SVB_Financial closure is certainly disrupting startups across the world. Startups are an important part of #NewIndia Economy," Chandrasekhar said in a tweet. The minister said he will meet with the Indian startups next week "to understand the impact on them and how the Narendra Modi government can help them "during this crisis." According to recent data by global software-as-a-service (SaaS)-based market intelligence platform Tracxn, SVB had exposure in at least 21 startups in India although it did not reveal the size of the investment in these startups. Top venture capitalist (VC) firms have also issued a joint statement on the collapse of SVB, one of the largest US banks serving the global startup community, saying they are "deeply disappointing and concerning". According to reports, SVB was a bank to more than 2,500 venture capital firms, including Lightspeed, <keyword id="6581358" type="General" weightage="50" keywordseo="bain-capital" source="Orion">Bain Capital</keyword> and Insight Partners. On Friday, the <keyword id="905063" type="General" weightage="50" keywordseo="us-federal-deposit-insurance-corporation" source="Orion">US Federal Deposit Insurance Corporation</keyword> (FDIC) took control of the SVB's $175 billion in customer deposits. US-based technology startup accelerator Y Combinator, which has invested in thousands of startups, including at least 200 from India, has written a petition to US Treasury Secretary Janet Yellen and others, asking them to prevent further shockwaves that could lead to financial crisis and layoffs of more than 100,000 workers. Over 1,200 CEOs and founders representing over 56,000 employees have already signed the petition, written by Garry Tan, CEO and President of Y Combinator, to save startups and hundreds of thousands of jobs. SEE ALSO: <a href="https://www.businessinsider.in/international/news/us-bank-svb-taken-over-is-largest-failure-since-2008/articleshow/98560513.cms">US bank SVB taken over is largest failure since 2008</a> <a href="https://www.businessinsider.in/careers/news/meta-to-begin-laying-off-another-11k-employees-in-multiple-waves-next-week/articleshow/98558203.cms">Meta to begin laying off another 11K employees in multiple waves next week</a> <a href="https://www.businessinsider.in/entertainment/news/not-just-game-of-thrones-144-hbo-originals-are-exiting-disney-hotstar/slidelist/98541137.cms">HBO Originals White Lotus, Big Little Lies &amp; more that’ll vanish from Disney+ Hotstar</a>

SVB collapse: Minister Chandrasekhar to meet Indian startups to see how govt can help them

<ul><li>The 17 former branches of <keyword id="16953072" type="General" weightage="20" keywordseo="silicon-valley-bridge-bank" source="Orion">Silicon Valley Bridge Bank</keyword>, <keyword id="220723" type="General" weightage="20" keywordseo="national-association" source="Orion">National Association</keyword>, will open as FirstCitizens Bank &amp; Trust Company on Monday, March 27, 2023, FDIC said.</li><li>Customers of Silicon Valley Bridge Bank, National Association, should continue to use their current branch until they receive notice from <keyword id="16953457" type="General" weightage="20" keywordseo="first-citizens-bank" source="Orion">First Citizens Bank</keyword> &amp; Trust Company, the regulator said. </li></ul> San Francisco, March 27 (IANS) The US Federal Deposit Insurance Corporation (FDIC) has announced that First Citizens Bank and Trust Company of Raleigh, North Carolina entered a purchase agreement for all deposits and loans of Silicon Valley Bridge Bank, National Association. "The 17 former branches of Silicon Valley Bridge Bank, National Association, will open as FirstCitizens Bank &amp; Trust Company on Monday, March 27, 2023," Fox Business quoted the FDIC as saying in a statement. "Customers of Silicon Valley Bridge Bank, National Association, should continue to use their current branch until they receive notice from First Citizens Bank &amp; Trust Company that systems conversions have been completed to allow full service banking at all of its other branch locations," the statement continued. Depositors of the Santa Clara, California-located bank will automatically become depositors of First�Citizens Bank &amp; Trust Company, according to the statement, and all deposits will be assumed and insured by First�Citizens Bank &amp; Trust Company, up to the insurance limit, Fox Business reported. The FDIC said: "As of March 10, 2023, Silicon Valley Bridge Bank, National Association, had approximately $167 billion in total assets and about $119 billion in total deposits. Today's transaction included the purchase of about $72 billion of Silicon Valley Bridge Bank, National Association's assets at a discount of $16.5 billion." In addition, approximately $90 billion in securities and other assets will remain in the receivership for disposition by the FDIC, Fox Business reported.

First Citizens Bank reaches deal to purchase deposits, loans of Silicon Valley Bank

<ul><li><keyword id="6358584" type="General" weightage="20" keywordseo="hsbc" source="Orion">HSBC</keyword> says that the transaction 'completes immediately' and will be funded from existing resources.</li><li>The UK central bank said the deal will ensure the continuity of banking services, minimise disruption to the UK technology sector. </li></ul> HSBC UK Bank plc is acquiring Silicon Valley Bank UK Limited (SVB UK) for 1 pound, after a weekend of frantic negotiations by UK officials. In a statement, HSBC says the transaction "completes immediately". The acquisition will be funded from existing resources, the Guardian reported. "As at 10 March 2023, SVB UK had loans of around 5.5 billion pounds and deposits of around 6.7 billion pounds. For the financial year ending December 31, 2022, SVB UK recorded a profit before tax of 88 million pounds. SVB UK's tangible equity is expected to be around 1.4 billion pounds. Final calculation of the gain arising from the acquisition will be provided in due course," HSBC said. The sale to HSBC has been taken to "stabilise SVBUK", says the Bank of England. The UK central bank says the deal will ensure the continuity of banking services, minimise disruption to the UK technology sector and support confidence in the financial system, the Guardian reported. Importantly, the Bank of England and HM Treasury can confirm that all depositors' money with SVBUK is safe and secure as a result of this transaction. That will be a massive relief for tech companies, who feared an �existential threat' to their businesses if they had lost their funds at SVB UK, the Guardian reported. The BoE add that the deal with HSBC means SVB UK will not now be put into insolvency. It says, "SVBUK's business will continue to be operated normally by SVBUK. All services will continue to operate as normal and customers should not notice any changes".

HSBC acquires UK arm of Silicon Valley Bank for £1

<ul class="summary-list"><li>First Republic Bank's credit ratings were cut to junk status at S&amp;P Global and Fitch on Wednesday. </li><li>Each agency sees risks in depositors pulling their funds after Silicon Valley Bank's failure. </li></ul>First Republic Bank's credit rating was cut to so-called junk status at S&amp;P Global Ratings and Fitch Ratings on Wednesday, with the agencies citing risks that customers will withdraw funds from the San Francisco-based lender. The downgrades arrived during a frenzied time of trading in shares of First Republic Bank and other regional banks after last week's seizure of Silicon Valley Bank by regulators.That lender's clients rushed to pull their deposits after learning a jump in interest rates <a href="https://markets.businessinsider.com/news/stocks/silicon-valley-bank-svb-stock-price-bond-portfolio-firesale-treasury-2023-3">spurred billions in losses</a> in SVB's bond holdings. Since then, the federal government has rolled out a new liquidity mechanism to help prevent a run on other US banks."We believe the risk of deposit outflows is elevated at First Republic Bank despite the actions of federal banking regulators and the bank actively increasing its borrowing availability to mitigate risk associated with the bank failures over the last week," <a href="https://disclosure.spglobal.com/ratings/en/regulatory/article/-/view/type/HTML/id/2960193" target="_blank" rel="noopener">wrote S&amp;P Global Ratings analysts Nicholas Wetzel and Rian Pressman</a>. S&amp;P cut First Republic's long-term issuer credit rating to BB+ from A-. The BB+ rating is considered a "junk" classification of debt, meaning it's not investment grade. S&amp;P said all of its ratings on First Republic are on "negative" credit watch, signaling further downgrades are possible. Meanwhile, <a href="https://www.fitchratings.com/research/banks/fitch-downgrades-first-republic-to-bb-places-ratings-on-negative-watch-15-03-2023" target="_blank" rel="noopener">Fitch Ratings downgraded</a> its long-term issuer default rating on First Republic to BB from A- and placed it and other ratings on negative watch. It described First Republic's deposit base as "concentrated" with a strategic focus on wealthy and financially sophisticated customers in some urban coastal markets. "This not only drives a high proportion of uninsured deposits as a percentage of total deposits but also results in deposits that can be less sticky in times of crisis or severe stress," said Fitch. First Republic's <a href="https://ir.firstrepublic.com/static-files/89a1df66-7e28-4491-86aa-a331900db222" target="_blank" rel="noopener">latest 10-K filing</a> indicated 68% of its roughly $176 billion in deposits at the end of 2022 was uninsurable by the FDIC. The FDIC historically has insured deposits up to $250,000, but it guaranteed SVB's beyond that limit. Fitch added that First Republic's investment portfolio is relatively concentrated in long-dated municipal securities, affording it less flexibility. Overall, about 61% of the book value of the portfolio is comprised municipal securities, which is high compared with industry standards.First Republic<a href="https://www.businessinsider.com/first-republic-liquidity-jpmorgan-fed-bank-run-svb-svfg-2023-3"> on Sunday said</a> its liquidity position "remains very strong," and disclosed in a previous regulatory filing it had received $70 billion of liquidity from the Federal Reserve and JPMorgan Chase. Shares of First Republic fell 17% after coming off a trading halt earlier Wednesday. The shares began plunging last Thursday amid SVB's bank run, leaving them down by 59% through Tuesday's session. Investors have also set their sights on other regional banks, including <a href="https://markets.businessinsider.com/stocks/pacw-stock">PacWest,</a> on concerns their balance sheets pointed to similar risks of deposit runs. Fitch on Wednesday <a href="https://www.fitchratings.com/research/banks/fitch-places-pacwest-bancorp-on-rating-watch-negative-15-03-2023" target="_blank" rel="noopener">placed PacWest on a negative rating watch</a>.

First Republic Bank downgraded to junk by S&P and Fitch on risk of clients pulling deposits in the wake of SVB failure

<ul class="summary-list"><li>Bank of America added $15 billion in deposits, as JPMorgan and Citigroup saw big gains too.</li><li>Money is fleeing toward "too big to fail" banks as SVB's failure sparks panic.</li></ul>Within days of Silicon Valley Bank's sudden disintegration, <a href="https://markets.businessinsider.com/stocks/bac-stock">Bank of America</a> accrued over $15 billion in fresh deposits, sources told <a href="https://www.bloomberg.com/news/articles/2023-03-15/bofa-gets-more-than-15-billion-in-deposits-after-svb-failure#xj4y7vzkg" target="_blank" rel="noopener">Bloomberg</a>.The influx is part of the <a href="https://markets.businessinsider.com/news/stocks/svb-collapse-silicon-bank-valley-jpmorgan-wall-street-depositors-2023-3?amp">biggest deposit movement</a> in over a decade, as worries that other lenders may fail have spurred a flight to safety toward "too big to fail" institutions. <a href="https://finance.yahoo.com/news/u-banking-behemoths-attract-flood-174935733.html" target="_blank" rel="noopener">Reuters</a> and Bloomberg reported that <a href="https://markets.businessinsider.com/stocks/c-stock">Citigroup</a>, <a href="https://markets.businessinsider.com/stocks/jpm-stock">JPMorgan</a> and Wells Fargo are also adding billions in deposits. Banks have had to accelerate the onboarding process for new customers, given the heightened demand.But the lenders have avoided actively soliciting customers from other banks out of fear that deposit outflows could worsen, sources told Reuters.Other institutions have seen inflows too. <a href="https://markets.businessinsider.com/news/stocks/charles-schwab-ceo-bettinger-clients-deposits-4-billion-svb-panic-2023-3">Charles Schwab clients poured $4 billion into the firm at the height of SVB panic on Friday</a>, said CEO Walter Bettinger. That's double the daily inflows of about $2 billion that Schwab has been averaging so far this month, <a href="https://www.youtube.com/watch?v=E38qSneYQUU" target="_blank" rel="noopener nofollow">he told CNBC</a> on Tuesday. Last week, panic erupted when SVB disclosed a <a href="https://markets.businessinsider.com/news/stocks/svb-silicon-valley-bank-collapse-jpmorgan-morgan-stanley-bank-stocks-2023-3">$1.8 billion loss</a> from the sale of a bond portfolio. The bank run that ensued spread fear throughout the banking industry, especially regional lenders.The massive shift to the banking giants comes despite federal regulators guaranteeing SVB deposits beyond the typical $250,000 limit, raising expectations that all deposits throughout the US financial system will receive similar backing.On Wednesday, worries about the financial system extended to Europe, as <a href="https://markets.businessinsider.com/news/stocks/stock-market-today-dow-spx-credit-suisse-plunge-rattles-calm-2023-3">Credit Suisse</a> stock tumbled 20% after a top Saudi backer said more investments would not be coming.

Bank of America soaks up over $15 billion in new deposits as SVB panic sends money flooding into 'too big to fail' lenders

<ul class="summary-list"><li>US authorities could help ease bank concerns by protecting all depositors at mid-tier banks, Mohamed El-Erian said. </li><li>Widespread consolidation in mid-tier banks would not be good as smaller lenders serve local needs. </li></ul>Anxiety about the US banking system following the implosion of Silicon Valley Bank could be lessened if regulators extended the protection given to SVB depositors to those at regional banks nationwide, according to economist Mohamed El-Erian. "I got lots of phone calls over the weekend from people with deposits in these banks. And I kept on telling them, 'Your deposits are safe,' and then they said, 'Well, what do I lose if I just move them to a bigger bank that's too large to fail?' And it's very difficult to counter that argument," <a href="https://news.sky.com/video/people-are-recalibrating-what-they-thought-the-risk-was-12838738" target="_blank" rel="noopener">El-Erian said in a Sky News interview on Monday</a>. Shares of <a href="https://markets.businessinsider.com/stocks/frc-stock?utm_medium=ingest&amp;utm_source=markets">First Republic Bank</a> and other mid-tier lenders were slammed lower over the past week on worries the companies could experience bank runs like the one that <a href="https://www.businessinsider.com/svb-silicon-valley-bank-startups-worry-run-pull-accounts-2023-3">crippled SVB</a> after depositors were spooked by its $1.8 billion loss on a massive bond sale.Regional bank stocks continued to be hit even after the Financial Deposit Insurance Corporation and others authorities said they would "fully protect" all depositors who had funds in Silicon Valley Bank <a href="https://www.businessinsider.com/us-government-bails-out-silicon-valley-bank-depositors-fdic-2023-3">beyond the FDIC's $250,000 limit</a> per account. Should deposits stream out of mid-tier banks, that will lead to damaging consolidation in the US banking sector, said El-Erian. "The US banking system relies on these regional banks and the smaller banks to serve local and regional needs. So it's not a good thing. I think you can stop this process from destabilizing by simply saying that the deposit insurance that was given to the depositors at Silicon Valley Bank is now available to all banks."The collapse of SVB and Signature Bank left <a href="https://www.businessinsider.com/jpmorgan-big-banks-benefit-from-silicon-valley-bank-collapse-2023-3">more than </a><a href="https://www.businessinsider.com/jpmorgan-big-banks-benefit-from-silicon-valley-bank-collapse-2023-3">$200 billion in cash deposits</a> looking for a new home, and big banks seen as "too big to fail" such as Bank of America and JPMorgan were expected to be among the top beneficiaries of inflows. Mid-tier banks will likely suffer deposit outflows, "but not for any reason to do with them," Allianz's chief economic advisor said. "They just happen to be in the wrong neighborhood. And I think the authorities need to move really quickly. And it's very easy to do - you formalize what you did for Silicon Valley Bank for these other banks." <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4387676" target="_blank" rel="noopener">There are 186 US banks that face risk</a> of collapse like SVB should their depositors rush for withdrawals, according to findings by economists in a paper posted on the Social Science Research Network.First Republic last week landed a <a href="https://markets.businessinsider.com/news/stocks/first-republic-bank-svb-morgan-stanley-jpmorgan-talks-financial-aid-2023-3?_gl=1*s03799*_ga*MTgwMDE1NjcyOC4xNjU1MjA3MDIz*_ga_E21CV80ZCZ*MTY3OTMxMjMzNS4xMDE0LjEuMTY3OTMyMDE1Ni41NC4wLjA.">$30 billion rescue package</a> from a group of 11 banks led by JPMorgan and Bank of America. Its shares dropped Monday after S&amp;P Global Ratings downgraded the San Francisco lender's credit rating further in so-called junk territory, saying the package may not be enough to resolve its liquidity and other challenges. But <a href="https://markets.businessinsider.com/stocks/pacw-stock">PacWest</a> and <a href="https://markets.businessinsider.com/stocks/wal-stock?miRedirects=1">Western Alliance Bancorp</a> shares were moving higher early Monday.

The US could ease stress on the banking system by fully insuring deposits of regional banks like those at failed SVB, Mohamed El-Erian says

<ul class="summary-list"><li>The Fed has so far saved the stock market from crashing, thanks to massive liquidity, Ed Yardeni said.</li><li>He pointed to the Fed's Bank Term Funding Program, which offers short-term loans to lenders.</li></ul>The Federal Reserve has so far saved the stock market from crashing after the implosion of Silicon Valley Bank last month, thanks to its massive liquidity injections, according to market veteran Ed Yardeni.In a recent <a href="https://www.yardeniquicktakes.com/on-the-lookout-for-a-bank-credit-crunch/?ref=yardeni-quicktakes-newsletter" target="_blank" rel="noopener">blog post</a>, Yardeni pointed to the Fed's Bank Term Funding Program, which was announced shortly after the crash of Silicon Valley Bank last month. The program offers short-term loans to financial institutions in order to help ease<a href="https://www.federalreserve.gov/newsevents/pressreleases/monetary20230312a.htm" target="_blank" rel="noopener"> liquidity stress</a> – ensuring banks have enough money on hand in event of a deposit run, which led to SVB's collapse in early March."In effect, the <a href="https://markets.businessinsider.com/news/stocks/stock-market-outlook-fed-put-inflation-jobs-report-economy-powell-2022-10">Fed Put</a> is back," Yardeni said, comparing the BTFP to the central bank's practice of lowering interest rates in order to buoy stock prices. "Though it is aimed at backstopping the banks this time, which indirectly supports the stock market. The question is whether that will do the trick to stop a credit crunch and a stock market crash. The jury is out, but so far so good."According to <a href="https://www.federalreserve.gov/releases/h41/20230406/" target="_blank" rel="noopener">central bank data</a>, the Fed's average total loan balance reached $326.4 billion last week, $311 billion higher than what was seen in the first week of March. That's the sharpest increase since the 2008 recession, which is "disturbing," Yardeni said. But in the week ending April 5, volumes fell $31.6 billion, a sign liquidity stress is starting to abate. Bank deposit outflows across all commercial banks in the US also fell $107 billion in the seven days ending March 29.SVB's collapse last month sparked a rapid sell-off in bank and regional bank stocks. But <a href="https://markets.businessinsider.com/news/stocks/stock-market-news-today-sp500-dow-nasdaq-svb-sale-crisis-2023-3">troubled banks have started to regain their footing</a>, partly due to government interventions, like <a href="https://www.businessinsider.com/us-government-bails-out-silicon-valley-bank-depositors-fdic-2023-3">federal regulators backing all of SVB's deposits</a>, and the US Treasury assuring markets the government would continue to <a href="https://markets.businessinsider.com/news/stocks/svb-yellen-banking-crisis-depositors-first-republic-fdic-stabilizing-2023-3?amp=&amp;utm_medium=ingest&amp;utm_source=markets">protect depositors.</a>Still, bearish market commentators warn that more pain could be ahead for stocks, as SVB's failure is likely to tighten credit conditions, which could put the economy one step closer to a recession.DataTrek co-founder <a href="https://markets.businessinsider.com/news/stocks/silicon-valley-bank-crisis-recession-economy-interest-rates-fed-inflation-2023-3">Nicholas Colas</a> told Insider that he sees a recession in the next 12 months as inevitable, and JPMorgan's top quant strategist said the collapse of SVB likely meant the Fed was "past the point of no return," suggesting a <a href="https://markets.businessinsider.com/news/stocks/recession-warning-banking-crisis-stock-market-outlook-jpmorgan-svb-collapse-2023-3">soft landing was unlikely</a>.

The Fed has so far saved the stock market from crashing after SVB's implosion by injecting billions to backstop deposits, market veteran Ed Yardeni says

Welcome back! <a href="https://twitter.com/dandefrancesco">Dan DeFrancesco</a> in NYC, and I feel like my entire life has been a lie after <a href="https://www.insider.com/tiktok-artificial-sizzle-fajitas-restaurant-water-special-sauce-chilis-dennys-2023-3">learning the truth about "sizzling" fajitas at restaurants.</a>Today, we've got stories on a fintech that's <a href="https://www.businessinsider.com/fintech-symphony-engineering-office-sophia-antipolis-south-france-2023-3">set up shop in the south of France</a>, the <a href="https://www.businessinsider.com/the-kings-college-financial-troubles-small-christian-college-2023-3">potential downfall of a small, Christian college with Wall Street ties you've probably never heard of</a>, and <a href="https://www.insider.com/avoid-these-intermittent-fasting-mistakes-for-weight-loss-researcher-2023-3">why you're doing intermittent fasting all wrong</a>. But first, now what?If this was forwarded to you, <a href="https://www.businessinsider.com/subscription/newsletter/10-things-on-wall-street">sign up here</a>. Download Insider's app <a href="https://www.insider.com/app">here</a>.<a href="https://www.businessinsider.com/silicon-valley-bank-failure-long-term-impact-tech-vc-finance-2023-3" target="_blank" rel="noopener"></a>1. Picking up the pieces from SVB.Where do we go from here?It's just over a week from Federal regulators announcing they would be <a href="https://www.businessinsider.com/us-government-bails-out-silicon-valley-bank-depositors-fdic-2023-3">bailing out depositors of Silicon Valley Bank and Signature Bank</a>. Now, the FDIC said Sunday that New York Community Bancorp's Flagstar Bank will take on <a href="https://www.fdic.gov/news/press-releases/2023/pr23021.html" target="_blank" rel="noopener">nearly all of Signature Bridge Bank's deposits</a>.The initial bail out was meant to stop panic among the general public and limit contagion.About that...The past week has not been kind to the banking industry. SVB Financial, the parent company, <a href="https://markets.businessinsider.com/news/stocks/svb-bankruptcy-chapter-11-auction-silicon-valley-bank-closure-fdic-2023-3?_gl=1*1r388ph*_ga*NDEwMTkzOTE2LjE2NjYxMjcyNDQ.*_ga_E21CV80ZCZ*MTY3OTA2MDYxNC41MDAuMS4xNjc5MDc2NTU3LjYwLjAuMA..">has filed for bankruptcy</a> as it still awaits a potential buyer. Meanwhile, the biggest US banks <a href="https://markets.businessinsider.com/news/stocks/first-republic-bank-svb-morgan-stanley-jpmorgan-talks-financial-aid-2023-3?_gl=1*h8ou9k*_ga*NDEwMTkzOTE2LjE2NjYxMjcyNDQ.*_ga_E21CV80ZCZ*MTY3OTI0NzMxOS41MDEuMS4xNjc5MjQ5MjEzLjguMC4w">stepped in to deposit $30 billion into First Republic</a>.Still, that <a href="https://www.businessinsider.com/first-republic-bank-rescue-sale-problems2023-3">might still not be enough to save the beleaguered bank</a>. It's gotten so bad that famed investor and noted Midwesterner Warren Buffett is <a href="https://www.businessinsider.com/warren-buffett-white-house-investment-in-regional-banks-2023-3">talking to the Biden administration about how to save regional banks</a>. The bad banking vibes have even spread across the pond. Credit Suisse, whose problems long preceded SVB's downfall, to be fair, <a href="https://www.businessinsider.com/credit-suisse-ubs-offers-up-to-billion-rescue-deal-report-2023-3">is getting acquired by Swiss rival UBS</a>. The deal is worth $2 billion, a considerable amount less than what the bank's market cap was on Friday. Here's a <a href="https://www.snb.ch/en/mmr/reference/pre_20230319/source/pre_20230319.en.pdf">statement from the Swiss National Bank on the news</a>.In an hour-long call held late on Sunday evening, top UBS executives <a href="https://www.businessinsider.com/ubs-credit-suisse-acquisition-colm-kelleher-2023-3">defended their decision</a> — and analysts began breaking down <a href="https://www.businessinsider.com/ubs-credit-suisse-acquisition-colm-kelleher-2023-3">what comes next</a>.But, as we look at <a href="https://www.businessinsider.com/ubs-credit-suisse-acquisition-colm-kelleher-2023-3">what the future holds</a> for the world of finance, it's worth remembering how we got here. Insider has you covered with three features looking at <a href="https://www.businessinsider.com/vcs-and-founders-silicon-valley-bank-meltdown-fdic-supporting-bank-2023-3?r=rr">the play-by-play perspective on how SVB fell apart</a>, <a href="https://www.businessinsider.com/big-banks-svb-first-republic-jpmorgan-rescue-crisis-2023-3">why big banks came out on top</a>, and <a href="https://www.businessinsider.com/silicon-valley-bank-failure-long-term-impact-tech-vc-finance-2023-3">how the knock-on effects will be felt for years to come across industries</a>.<a href="https://www.businessinsider.com/vcs-and-founders-silicon-valley-bank-meltdown-fdic-supporting-bank-2023-3?r=rr">Panic and recrimination: Inside Silicon Valley's first real financial crisis.</a><a href="https://www.businessinsider.com/big-banks-svb-first-republic-jpmorgan-rescue-crisis-2023-3">Wall Street keeps winning even in a banking crisis.</a><a href="https://www.businessinsider.com/silicon-valley-bank-failure-long-term-impact-tech-vc-finance-2023-3">Silicon Valley Bank was the bank for tech. Its collapse is everyone's problem.</a><a href="https://www.businessinsider.com/ubs-credit-suisse-acquisition-colm-kelleher-2023-3">Top UBS executives defend their "emergency rescue" of Credit Suisse. Here's what comes next.</a>In other news:<a href="https://www.businessinsider.com/fintech-symphony-engineering-office-sophia-antipolis-south-france-2023-3"></a><div type="image" title="French Riviera" height="4512" width="7033" msid="98811383" hostid="261" sizebytes="3303096"></div>2. Fintech in the south of France. Messaging and workflow startup Symphony opened an engineering hub just outside Nice where employees can split their time between the Alps and the French Riviera. (Must be Nice!) <a href="https://www.businessinsider.com/fintech-symphony-engineering-office-sophia-antipolis-south-france-2023-3">Check out photos from an office location we are all jealous of.</a>3. VC's LPs weigh in. The people backing venture capitalists, known as limited partners, share their thoughts on how VCs handled the crisis at Silicon Valley Bank. <a href="https://www.businessinsider.com/lp-react-how-venture-capital-responded-svb-collapse-2023-3" target="_blank" rel="noopener">Read more here</a>.4. My college might soon no longer exist. Insider's Paige Hagy has a fascinating first-person look at her experience attending The King's College. The small, Christian school in New York City's financial district is on the brink of going under. <a href="https://www.businessinsider.com/the-kings-college-financial-troubles-small-christian-college-2023-3">You're gonna want to read this one.</a>5. Invest in single-family rentals, they said. It'll be easy, they said. From iguanas squatting in the attic to dozens of snakes living in the walls, Wall Street is getting a crash course on being a landlord at scale. <a href="https://www.insider.com/corporate-single-family-rental-landlords-face-peculiar-maintenance-2023-3">More wild examples of the challenges of property management</a>. 6. PE and porn. The parent company of Pornhub (a website I am sure none of you are familiar with) was acquired by a new private-equity firm named, wait for it, Ethical Capital, The Financial Times reports. <a href="https://www.ft.com/content/69c3295e-6f45-4b5f-8e7b-3b8d56ca46c8?campaign_id=4&amp;emc=edit_dk_20230317&amp;instance_id=87931&amp;nl=dealbook&amp;regi_id=110905846&amp;segment_id=128004&amp;te=1&amp;user_id=4cbce85b39b05a62487c63187ecd51cd">More on the deal here. </a>7. Forget Deadheads and Parrotheads, the Swifties are on tour. Taylor Swift's "Eras Tour" kicked off this weekend in Arizona. We broke down what goes into preparing a city for the arrival of the superstar's rabid fans. <a href="https://www.businessinsider.com/taylor-swift-starts-eras-tour-glendale-arizona-swift-city-2023-3?_gl=1*1kknr4y*_ga*NDEwMTkzOTE2LjE2NjYxMjcyNDQ.*_ga_E21CV80ZCZ*MTY3OTA2MDYxNC41MDAuMS4xNjc5MDg0OTc0LjM5LjAuMA..">From new bars to thousands of cookies, here's how to build out "Swift City."</a>8. So you want to get into the fast-food business? Fast food could mean fast money, but it won't necessarily come cheap. We've got the rundown on <a href="https://www.businessinsider.com/mcdonalds-chick-fil-a-taco-bell-fast-food-franchise-costs-2019-5">how much it costs to open 12 of the biggest fast-food chains in the US.</a>9. How to ride the rails in style. Insider's Joey Hadden has ridden nearly 1,000 miles across multiple countries on business-class trains. <a href="https://www.insider.com/business-class-trains-amtrak-via-rail-trenitalia-canada-europe-ranked-2023-3">Here's where she ranks them all. </a>10. If you're trying intermittent fasting, don't do this. It's a popular diet, but you need to do it right! <a href="https://www.insider.com/avoid-these-intermittent-fasting-mistakes-for-weight-loss-researcher-2023-3">These are five common mistakes to avoid, according to a researcher. </a>Curated by Dan DeFrancesco in New York. Feedback or tips? Email <a href="mailto:ddefrancesco@insider.com">ddefrancesco@insider.com</a>, tweet <a href="https://twitter.com/dandefrancesco">@dandefrancesco</a>, or <a href="https://affiliate.insider.com?h=b83e78f6bb45aba7034c3baf1ec66d1b6c1d3afa26264bdb8604d5b9f2351262&amp;postID=6414aa26a5f1ba686b007645&amp;site=bi&amp;u=https%3A%2F%2Fwww.linkedin.com%2Fin%2Fdan-defrancesco-29b12449%2F">connect on LinkedIn</a>. Edited by Jeffrey Cane (tweet <a href="https://twitter.com/jeffrey_cane">@jeffrey_cane</a>) in New York and Hallam Bullock (tweet <a href="https://twitter.com/hallam_bullock">@hallam_bullock</a>) in London.

Picking up the pieces in the wake of SVB's collapse

<ul class="summary-list"><li>Big banks are sitting on $650 billion of unrealized losses, Moody's has estimated.</li><li>It's a sign even Wall Street's best-known names are feeling the heat from the Treasury-market rout.</li></ul>Crashing bond prices <a href="https://markets.businessinsider.com/news/stocks/svb-silicon-valley-bank-collapse-jpmorgan-morgan-stanley-bank-stocks-2023-3">sank Silicon Valley Bank</a> in March — and there's reason to believe that what triggered the California lender's collapse may be haunting Wall Street again.The brutal <a href="https://markets.businessinsider.com/news/bonds/bond-market-crash-what-are-treasury-yields-stocks-economy-americans-2023-10">Treasury-market meltdown</a> has hit some of the largest financial institutions hard, dragging down the share prices of big names such as <a href="https://markets.businessinsider.com/stocks/bac-stock">Bank of America</a> and fueling fears that the turmoil triggered by SVB's bankruptcy may not be over just yet.Here's everything you need to know about unrealized losses, including why they're dragging on bank stocks and whether they could trigger another financial crisis.<h2>Unrealized losses</h2>Treasury bonds — debt instruments the government issues to fund its spending — have been on a nightmarish run since the onset of the pandemic, with investors fretting about <a href="https://markets.businessinsider.com/news/stocks/stock-market-charts-crash-federal-reserve-interest-rates-bonds-crypto-2023-6">rising interest rates</a> and the long-term viability of <a href="https://markets.businessinsider.com/news/bonds/bond-market-crash-government-debt-ceiling-crisis-wall-street-deficit-2023-10">the US's massive deficit</a>.BlackRock's <a href="https://www.marketwatch.com/investing/fund/tlt" target="_blank" rel="noopener">iShares 20+ Year Treasury fund</a>, which tracks longer-duration debt prices, has plunged 48% since April 2020. Meanwhile, <a href="https://markets.businessinsider.com/rates/u-s--rates-10-years">10-year Treasury yields</a>, which move in the opposite direction to prices, recently <a href="https://markets.businessinsider.com/news/bonds/bond-market-crash-us-treasury-yields-federal-reserve-debt-crisis-2023-10">spiked above 5%</a> for the first time in 16 years.As a result of that sell-off, some of the US's biggest banks are now sitting on unrealized, or "paper," losses worth hundreds of billions of dollars. That means the value of their bond holdings has plunged, but they've chosen to hold on rather than offload their investments.<a href="https://www.reuters.com/business/finance/bank-americas-unrealized-losses-securities-rose-1316-bln-2023-10-17/" target="_blank" rel="noopener">Moody's</a> estimated last month that US financial institutions had racked up $650 billion worth of paper losses on their portfolios by September 30 — up 15% from June 30. The ratings agency's data still doesn't account for a hellish October where the longer-term collapse in bond prices spiraled into one of the <a href="https://markets.businessinsider.com/news/bonds/treasury-bond-yields-market-selloff-market-crashes-dot-com-bubble-2023-10">worst routs in market history</a>.These "losses" are not the same as debt, however, which describes actual borrowings that need to be repaid. <a href="https://markets.businessinsider.com/stocks/bac-stock">Bank of America</a> is the big lender worst affected by the crash in bond prices, having disclosed a potential $130 billion hole in its balance sheet last month.The other "Big Four" banks — <a href="https://markets.businessinsider.com/stocks/c-stock">Citigroup</a>, <a href="https://markets.businessinsider.com/stocks/jpm-stock">JPMorgan Chase</a>, and <a href="https://markets.businessinsider.com/news/wfc-stock">Wells Fargo</a> — have also racked up unrealized losses in the tens of billions, according to their second- and third-quarter earnings reports.<h2>Another SVB-style crisis?</h2>Silicon Valley Bank failed in March after disclosing a $1.8 billion loss on its own bond portfolio, triggering a run on deposits. Similarly, big banks' huge unrealized losses are also sparking concern among Wall Street doom-mongers."'Higher for longer' is absurd baloney," the market vet <a href="https://twitter.com/Convertbond" target="_blank" rel="noopener">Larry McDonald said in a post on X</a> Sunday, referring to the Fed signaling it would hold interest rates at about their current level well into 2024 in a bid to kill off inflation. "A 6% + Fed funds and Bank of America is near insolvency."It's important to remember that BofA's $130 billion losses are still unrealized. Unlike SVB, it isn't officially in the red yet because it has not sold its bond holdings.The bank's chief financial officer, Alastair Borthwick, shrugged off the market's worries on last month's earnings call, pointing out that most of the bank's fixed-income portfolio was low-risk government bonds it planned to hold until the debt expires."All of these are unrealized losses are on government-guaranteed securities," he told reporters. "Because we're holding them to maturity, we will anticipate that we'll have zero losses over time."There's still a possibility that spooked BofA customers will pull their money en masse, as they did with SVB — but that hasn't happened. In fact, deposits are up after registering about 200,000 new accounts in the third quarter.Some analysts also believe the worst of the Treasury-market rout is now over, with the Federal Reserve starting to signal that its tightening campaign is nearly done. Ten-year yields have softened in recent weeks, falling from 5% to 4.6% as of Tuesday.<h2>Banks under pressure</h2>That doesn't mean the Big Four banks can afford to just dismiss the bond rout.In a paper published earlier this year, researchers for the <a href="https://www.kansascityfed.org/Economic%20Review/documents/9473/EconomicReviewV108N2MarshLaliberte.pdf" target="_blank" rel="noopener">Kansas City Fed</a> concluded that paper losses could still drag down a bank's share price: "Unrealized losses can increase equity costs as investors' perceptions of financial health deteriorate."That's been happening this year, with three of the big four banks' stocks sliding. Predictably, Bank of America has been worst affected, with its stock down 24% over the past year and 14% year-to-date."Worries over unrealized losses on sovereign bond holdings are also weighing on the US lenders, to again reflect concerns over rising interest rates and whether the US Federal Reserve will ultimately tighten policy by too much for too long," AJ Bell's Russ Mould said in a note last week.Unrealized losses may not be about to trigger another financial crisis — but as long as bank stocks are down, they'll remain a concern for Wall Street's biggest names.

You Searched For "svb deposits" and got 10 results

SVB solution ensures taxpayer dollars are not put at risk: President Biden

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First Republic Bank downgraded to junk by S&P and Fitch on risk of clients pulling deposits in the wake of SVB failure

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Bank of America soaks up over $15 billion in new deposits as SVB panic sends money flooding into 'too big to fail' lenders

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The US could ease stress on the banking system by fully insuring deposits of regional banks like those at failed SVB, Mohamed El-Erian says

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The Fed has so far saved the stock market from crashing after SVB's implosion by injecting billions to backstop deposits, market veteran Ed Yardeni says

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Picking up the pieces in the wake of SVB's collapse

Dan DeFrancesco

Bond-market crash leaves big banks with $650 billion of unrealized losses as the ghost of SVB continues to haunt Wall Street

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