This past weekend, all eyes were on banking and the Silicon Valley Bank, a prominent bank for startups in Santa Clara, California.
Early on Friday, the bank was put under the control of the Federal Deposit Insurance Corporation. Simultaneously, the chair of the Federal Reserve, Jerome H. Powell, told lawmakers last Tuesday that the central bank might have to raise interest rates more than it expected, and maybe at a faster rate in order to try and reign in inflation.
Regulators closed SVB on Friday when it experienced a traditional bank run.
It is the second largest bank failure in U.S. history, behind only the 2008 failure of Washington Mutual.
As the SVB collapsed, regulators worked to find a buyer for the bank, which had more than $200 billion in assets and catered to tech startups, venture capital firms, and well-paid technology workers as far away as the UK and China.
Enter the government bailout. At first, it was declared that the $250,000 insurance limit would cover money for customers of the bank up to that amount. But then, the Treasury Department and the Federal Reserve together announced that it would cover ALL monies in the bank.
In an unprecedented Sunday night decision, they’ve just released a joint statement saying they will make all depositors whole — regardless of the $250,000 normal FDIC limit.
@federalreserve @USTreasury @FDICgov issue statement on actions to protect the U.S. economy by strengthening public confidence in our banking system, ensuring depositors' savings remain safe: https://t.co/YISeTdFPrO
— Federal Reserve (@federalreserve) March 12, 2023
Here is the full press release, from the Federal Reserve:
Washington, DC — The following statement was released by Secretary of the Treasury Janet L. Yellen, Federal Reserve Board Chair Jerome H. Powell, and FDIC Chairman Martin J. Gruenberg:
Today we are taking decisive actions to protect the U.S. economy by strengthening public confidence in our banking system. This step will ensure that the U.S. 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.
After receiving a recommendation from the boards of the FDIC and the Federal Reserve, and consulting with the President, Secretary 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 Silicon Valley Bank will be borne by the taxpayer.
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 Silicon Valley Bank, no losses will be borne by the taxpayer.
Shareholders and certain unsecured debtholders 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.
Finally, the Federal Reserve Board on Sunday announced it will make available additional funding to eligible depository institutions to help assure banks have the ability to meet the needs of all their depositors.
The U.S. banking system remains resilient and on a solid foundation, in large part due to reforms that were made after the financial crisis that ensured better safeguards for the banking industry. Those reforms combined with today’s actions demonstrate our commitment to take the necessary steps to ensure that depositors’ savings remain safe.
The Biden White House is taking ownership of the situation, once more delving into private enterprise at the expense of the taxpayers. A White House statement early this morning said, “The president will tell Americans they can have confidence that our banking system is safe, and their deposits will be there when they need them.” Biden is scheduled to say more on the matter this morning.
The run on funds and collapse of the 16th largest bank in the U.S. and its bailout by the Democrat government should have consumers worried about the state of banking and the possible consequences of the matter, especially in regard to cryptocurrency.
As We Love Trump reports,
“After saying earlier in the day that Bailouts were off the table, we’re suddenly right back to 2008 again and protecting the rich and the ‘too big to fail'”:
— Darth Powell 🦈🇺🇲🇺🇦🇵🇱🇫🇮 (@GRomePow) March 12, 2023
Yet another financial note early this morning is that there was a spike in cryptocurrency trading. Bitcoin reached $22,560.20 at 3 am on Monday, reaching its highest level in 10 days. The crypto market overall topped $1 trillion thanks to a boost of roughly $70 billion, Fox business reports.
We Love Trump pointed out:
But longtime readers of WeLoveTrump know we are big XRP fans. Perhaps it was never Bitcoin. Perhaps XRP has been “the one” all along? Meanwhile, Bitcoin and all of crypto are PUMPING:
The Bank of #Bitcoin remains open.
— Michael Saylor⚡️ (@saylor) March 12, 2023
I’ve been saying it’s going to be a wild week, what if we get a Ripple/SEC settlement this week on top of everything else?
Did #Ripple just pay their court fees meaning the case could be over tomorrow?👀 #XRP pic.twitter.com/EJBOhIBN0g
— XRP QUEEN🤍 (@crypto_queen_x) March 12, 2023