Silicon Valley Bank collapses

Page 2 - Seeking answers? Join the AnandTech community: where nearly half-a-million members share solutions and discuss the latest tech.

conehead433

Diamond Member
Dec 4, 2002
5,564
889
126
Something seems to be going on with Wells Fargo as a number of customers have reported suddenly not being able to withdraw funds, some showing negative balances, deposits pending, etc. Not a good look to inspire confidence in our banking system.
"Wells Fargo Says “Technical Issue” Causing Customers to See Missing Deposits in Their Accounts" I wonder what Jim Hardy would think.
 

alcoholbob

Diamond Member
May 24, 2005
6,271
323
126
USDC is in freefall because ~8.3% of Circle's cash reserves are stuck in Silicon Valley Bank. So much for the most stable of stablecoins. Wouldn't it be funny if Tether outlasted USDC?
 

Paratus

Lifer
Jun 4, 2004
16,571
13,195
146
Explain it to me like I'm 5 years old ...in the grand scheme of things, how worrying is this for the economy as a whole?
It’s the end of the economy which will usher in a 1000 year reich held by Trump and the GOP. You know a standard Saturday.
 
Last edited:
  • Haha
Reactions: Zorba

cytg111

Lifer
Mar 17, 2008
22,872
12,545
136
Finance is the biggest crooks in history. Period. Double Perioid..

I hope you realize that whatever finance tax you're paying is probably higher than any church tax you've ever paid (is church tax a thing in the US?).

1%+ on everything you buy, tax, straight to the gods of finance. That's just straight up Satanism.

 

sportage

Lifer
Feb 1, 2008
11,493
3,158
136
I hate to say this but the Q's have been predicting this for years now. The FDIC will collapse (they claim) along with the IRS, and a new financial system will emerge with new currency to be called the rainbow currency. Rainbow? Better check with Ron DeSantis first... ;)

USD-Rainbow-Currency.jpg
Just a little Q humor.

However, I'm not so sure the banking system is as secure as they say. And treasury secretary Yellen did nothing to reassure the nation by stating "developments that concern a few banks I'm monitoring very carefully". Than implies more banks will be involved than just SVB.
And when a bank as large as SVB fails and people lose millions, that could easily create a domino effect. We really do not know how closely connected they really are, but we may find out come Monday. This is not just some national issue, this could rapidly become a global issue boomeranging back into a much larger national issue.

For what it's worth, I'm reminded of this movie scene. The financial institutions denied what was happening right up to the point when it actually happened.

 
  • Like
Reactions: feralkid

Thump553

Lifer
Jun 2, 2000
12,606
2,325
126
I love the FDIC.
This. I was peripherally involved in a FDIC liquidation once. The ground troops they send in are top-notch, smart and decisive. The difference between a FDIC managed bank liquidation and the usual business collapse/bankruptcy is night and day.

BTW to me the concept of maintaining a high seven figure balance in any one bank is fiscal malpractice.
 

drnickriviera

Platinum Member
Jan 30, 2001
2,412
197
116
Yes its per bank you have an account in, but not multiple accounts at the same bank, and different branches of the same bank count as the same bank.

I've been trying to get the true answer on this for a while. My understating is $250k/person per account type and $1m per institution. There are a few account categories that would apply to us normal folk. One is Single ownership, Other is Joint ownership

You can use the FDIC calculator to verify what coverage you have https://edie.fdic.gov/calculator.html

I did $275k in a single acct and $570k in a joint acct. $250 was covered from single and $500 from joint ($250 per owner)
 
  • Like
Reactions: GodisanAtheist

Pens1566

Lifer
Oct 11, 2005
11,278
7,609
136
Yeah, this could have likely been avoided if certain Dodd-Frank regs hadn't been rolled back.

No, this won't cause a market wide run. The bank in question was a bit too ... unique for that to really be a concern.
 

Exterous

Super Moderator
Jun 20, 2006
20,341
3,412
126
However, I'm not so sure the banking system is as secure as they say. And treasury secretary Yellen did nothing to reassure the nation by stating "developments that concern a few banks I'm monitoring very carefully". Than implies more banks will be involved than just SVB.
And when a bank as large as SVB fails and people lose millions, that could easily create a domino effect. We really do not know how closely connected they really are, but we may find out come Monday. This is not just some national issue, this could rapidly become a global issue boomeranging back into a much larger national issue.

For what it's worth, I'm reminded of this movie scene. The financial institutions denied what was happening right up to the point when it actually happened.

Something like 470 banks failed due to the 2008 financial crisis so monitoring a 'few' banks is pretty minimal in the grand scheme of things. I mean, sure SVB is big in terms of assets impacted but it was hit by a likely relatively uncommon interest rate + tech sector pinch. Not that we won't see pressure elsewhere but there isn't yet a systemic threat to the banking system as a whole.

With their assets largely tied up in stable, long term duration assets it probably (hopefully) won't take too much to make their customers whole or close to whole. A bank can come in - cover short term demands and, eventually, recoup or even make gains when those long term assets reach maturity.

Yeah, this could have likely been avoided if certain Dodd-Frank regs hadn't been rolled back.

I'm not sure if that is true. There wasn't anything inherently wrong (in terms of regulations) that I've seen reported yet in their operations. Their customers were unique (Tech startups) + the rapidly increasing interest rates hitting their long term asset holdings + tech sector downturn + small audience of very high networth individuals and companies suddenly doing a run on them. Yes they had a duration mismatch but I don't think Dodd-Frank would have covered this combination of events
 

K1052

Elite Member
Aug 21, 2003
45,492
31,876
136
small audience of very high networth individuals and companies suddenly doing a run on them

To some extent, maybe a rather large one, SV investors killed their own bank. The bank absolutely did not do everything right but would have survived if not for a $40B outflow.
 

Pens1566

Lifer
Oct 11, 2005
11,278
7,609
136
Something like 470 banks failed due to the 2008 financial crisis so monitoring a 'few' banks is pretty minimal in the grand scheme of things. I mean, sure SVB is big in terms of assets impacted but it was hit by a likely relatively uncommon interest rate + tech sector pinch. Not that we won't see pressure elsewhere but there isn't yet a systemic threat to the banking system as a whole.

With their assets largely tied up in stable, long term duration assets it probably (hopefully) won't take too much to make their customers whole or close to whole. A bank can come in - cover short term demands and, eventually, recoup or even make gains when those long term assets reach maturity.



I'm not sure if that is true. There wasn't anything inherently wrong (in terms of regulations) that I've seen reported yet in their operations. Their customers were unique (Tech startups) + the rapidly increasing interest rates hitting their long term asset holdings + tech sector downturn + small audience of very high networth individuals and companies suddenly doing a run on them. Yes they had a duration mismatch but I don't think Dodd-Frank would have covered this combination of events

It had to do with raising the threshold of oversight for systemically important institutions from $50B to $250B. SVB (~$220B) would have had additional regs/oversight under the old version that they didn't as of the Trump de-regulations. It would have required additional stress tests and capital requirements but here we are.
 

Zorba

Lifer
Oct 22, 1999
14,286
9,696
136
I've been trying to get the true answer on this for a while. My understating is $250k/person per account type and $1m per institution. There are a few account categories that would apply to us normal folk. One is Single ownership, Other is Joint ownership

You can use the FDIC calculator to verify what coverage you have https://edie.fdic.gov/calculator.html

I did $275k in a single acct and $570k in a joint acct. $250 was covered from single and $500 from joint ($250 per owner)
The question is why would you want that much money sitting in a bank account yielding basically nothing?
 

feralkid

Lifer
Jan 28, 2002
16,317
4,353
136
I hate to say this but the Q's have been predicting this for years now. The FDIC will collapse (they claim) along with the IRS, and a new financial system will emerge with new currency to be called the rainbow currency. Rainbow? Better check with Ron DeSantis first... ;)

View attachment 77972
Just a little Q humor.

However, I'm not so sure the banking system is as secure as they say. And treasury secretary Yellen did nothing to reassure the nation by stating "developments that concern a few banks I'm monitoring very carefully". Than implies more banks will be involved than just SVB.
And when a bank as large as SVB fails and people lose millions, that could easily create a domino effect. We really do not know how closely connected they really are, but we may find out come Monday. This is not just some national issue, this could rapidly become a global issue boomeranging back into a much larger national issue.

For what it's worth, I'm reminded of this movie scene. The financial institutions denied what was happening right up to the point when it actually happened.



At least we'd finally get Jackson's mug off the twenty...
 

andy2000

Member
Jul 5, 2011
73
20
81
My closest experience was back in 2008 when I was a Washington Mutual customer. It didn't quite make it to an FDIC takeover, but it was close. I believe the FDIC facilitated the buyout by Chase. I was impressed by the whole operation. One day is was Wamu, then next day is was Chase without a single interruption in services.