Second Biggest Bank Failures in the History of the US
On Friday some of the biggest banks in the United States (US), Wells Fargo, Bank of America, JPMorgan, Morgan Stanley collectively lost more than $50 billion in market value in one day. On the other hand, those banks still exist, but you cannot say the same for Silicon Valley Bank. As of Friday morning, Silicon Valley Bank or SVB has gone under completely. That makes the second-biggest bank failure in the history of US.
SVB financed nearly half of all venture-backed health care and technology companies in the United States. It also apparently held significant cash reserves for some of the biggest cryptocurrencies, and it is now gone. Federal regulators have renamed it and taken it over. This means that a lot of people lost a lot of money; money that apparently was not insured. The Federal Deposit Insurance Corporation (FDIC) only guarantees bank deposits up to $250,000, and according to some reports, more than 90% of all deposits at SBP exceeded that and it is unclear whether those people will ever see their money again.
In fact, when customers showed up at SVB’s branch in Manhattan to get their deposits back, Managers called the police. So, what we have here is a 1929 style bank run and that’s not a good sign for anyone. The question is whether the people who run SVB saw it coming. The CEO, a man called Greg Becker, apparently sold more than $2 million in bank stock over the last two weeks. According to the site, “Unusual Whales,” several other high-level employees of SVB, including Chief Marketing Officer Michelle Draper, Chief Operations Officer Phil Cox, General Counsel Michael Zuckert, all sold significant amounts of stock in SVB this year. Did those employees know their bank was in trouble? We don’t know and once again, where were the regulators? They’re supposed to prevent this. (Tucker Carlson – Fox News)
