WebProNews

Tag: Silicon Valley Bank

  • JPMorgan CEO Jamie Dimon Working on First Republic Rescue Plan

    JPMorgan CEO Jamie Dimon Working on First Republic Rescue Plan

    JPMorgan CEO Jamie Dimon is reportedly leading the charge to save First Republic Bank and restore confidence in the bank.

    First Republic is facing its worst crisis in 15 years on the heels of three other banks collapsing. Silicon Valley Bank collapsed in early March, and Signature Bank followed shortly after. Meanwhile, Credit Suisse’s freewheeling ways finally caught up with it, leading to its sale to rival UBS.

    According to The Wall Street Journal, Dimon is leading a coalition of banks that are trying to keep First Republic from following SVB and Signature. Dimon helped orchestrate eleven banks in depositing $30 billion into First Republic in an effort to restore confidence.

    The assisting banks have yet to rule out converting the deposit into a straight cash infusion if necessary.

    Either way, the lengths Dimon and his fellow bankers are going to demonstrate the fragility of the current economic situation.

  • Employees Blame ‘Stupid’ Silicon Valley Bank CEO

    Employees Blame ‘Stupid’ Silicon Valley Bank CEO

    After Silicon Valley Bank’s spectacular collapse last week, employees and industry insiders are blaming the CEO’s “stupid” decisions.

    Greg Becker, SVB’s CEO, announced last Wednesday that the bank needed to raise just north of $2 billion. What no one can explain, however, is why a 40-year veteran of the banking industry didn’t privately try to raise the capital before making an announcement.

    “That was absolutely idiotic,” the employee, who works on the asset management side of Silicon Valley Bank, told CNN in an interview. “They were being very transparent. It’s the exact opposite of what you’d normally see in a scandal. But their transparency and forthright-ness did them in.

    “People are just shocked at how stupid the CEO is,” the Silicon Valley Bank insider added. “You’re in business for 40 years and you are telling me you can’t raise $2 billion privately? Get on a jet and fly to Kuwait like everyone else and give them control of one-third of the bank.”

    Industry insiders shared the employee’s evaluation:

    “Someone lit a match and the bank yelled, ‘Fire!’ – pulling the alarms in earnest out of genuine concern for transparency and honesty,” Jeff Sonnenfeld and Steven Tian, the CEO and research director, respectively, at Yale School of Management’s Chief Executive Leadership Institute (CELI), told CNN.

    Sonnenfeld agreed that SVB’s leadership deserved criticism for a “tone-deaf, botched execution.”

  • Bitcoin Surges After Banks Collapse

    Bitcoin Surges After Banks Collapse

    On the heels of three banks collapsing in the last week, Bitcoin appears to be benefiting from consumer fears.

    The tech industry and financial markets are reeling from the collapse of Silicon Valley Bank (SVB) and Signature Bank. The tech industry was particularly dependent on SVB with its collapse still sending shock waves throughout the industry.

    According to Decrypt, Bitcoin is benefiting from spooked consumers and investors, with the cryptocurrency rising almost 20% since SVG’s collapse.

    In fact, the entire market appears to be getting a boost, with individual cryptos up across the board.

  • Regulators Shut Down Signature Bank

    Regulators Shut Down Signature Bank

    Regulators have shut down Signature Bank, the third bank in the last week, citing “systemic risk.”

    The last few days have been difficult for banks, especially those servicing the tech industry. Silicon Valley Bank has been in the news as the second-largest bank collapse in US history. With the financial downturn, tech customers withdrew enough funds to help cause a run on the bank, leading to its collapse. Regulators see the same kind of risk with Signature Bank, leading them to shut it down.

    A joint statement by Treasury, Federal Reserve, and FDIC announced the closure:

    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.

    Regulators did reaffirm that Silicon Valley Bank depositors will have access to their money on Monday:

    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.

  • Federal Government Will Not Bail Out Silicon Valley Bank

    Federal Government Will Not Bail Out Silicon Valley Bank

    Silicon Valley Bank (SVB) shocked the industry when it collapsed Friday, leaving a plethora of companies in limbo.

    SVB was the 16th-largest bank in the US, making it the second-largest bank collapse in US history. The bank’s collapse has left many of Silicon Valley companies and startups scrambling to address cash-flow issues.

    The collapse has also sparked questions about whether the government plans to bail the bank out, much like it did in the crash of 2008. According to AP News, Treasury Secretary Janet Yellen threw cold water on the idea.

    “We’re not going to do that again,” she said, referencing past bailouts. “But we are concerned about depositors, and we’re focused on trying to meet their needs.”

    Some experts are concerned that SVB’s collapse could spark a run on other banks, leading to more collapses. After all, it was tech companies’ run on SVB — in an effort to stay solvent during the financial downturn — that led to SVB’s failure. Yellen tried to offer reassurance that the banking system was sound.

    “The American banking system is really safe and well capitalized,” she said. “It’s resilient.”

    In the meantime, deposits insured by the government should be available Monday morning.