Will the collapse of Silicon Valley Bank spread to the broader industry? Is it a sign of tough times or is it nothing to be concerned about?

[Adaeva]

https://fortune.com/2023/03/10/silicon-valley-bank-failure-markets-what-is-next-warning-sign-for-federal-reserve/

Updates

+1 y

After the collapse of Silicon Valley Bank, gold has increased about $100 to slightly over $1,900 as investors seek a safe-haven.

[WaterIsland]

It will spread to the broader economy. The question is how much. Some companies are already struggling to meet payroll for their employees. Only a handful tho. So it isn’t impacting things on a large scale yet as far as anyone can see. I personally don’t believe that it’ll impact things in the way it did in 2007-2008. But I could be wrong.


That doesn’t mean anyone needs to panic. But it’s a good idea to review your finances. Ensure you have an emergency fund (ideally 3-6 months of expenses). Reduce (ideal get rid of) debt.


For most people they have less than $250,000 in their accounts. Which in the US is protected by the FDIC insurance. If you have more than that, or if your bank isn’t part of the FDIC, then that would be concerning and there is risk there.


But for the vast majority of people, it’s a good idea to review your finances. Ensure you have good backup plans, and emergency funds. And reduce risk.


That doesn’t mean panic. But these are things that people should be doing every so often regardless of the SVB failure.

[WaterIsland]

After I wrote this, the US Treasury, Federal Reserve, and FDIC issued a joint statement saying that they will guarantee all deposits (even those above the $250k limit). They announced that this will be done at no cost to US taxpayers. And SVB’s senior management has been let go. Shareholders of SVB stock will almost certainly see major losses still.

But by and large the US government took these actions to attempt to restore faith and confidence in the banking system.

It remains to be see if it will work. But it seems like the US government is willing to take drastic steps to ensure stability and protect the economy. Which I believe is a great thing. Especially since they found a way to do it without cost to the taxpayers.

[BeMuse]

Their book was relatively conservative. They basically were killed by the Federal Reserve with interest rate hikes on purpose…

[BeMuse]

It’s a robbery… You think central bankers stop with one heist? No, they are criminals and they keep robbing until you lock them up and hang them.

[BeMuse]

Either the people will end the Fed or the Fed will end the people... Where We Go One, We Go All. Pick a team.

[convo_king89]

The feds keep raising interest rate to control the flow of money, but banks lose money when they payback loans with cuz now it costs them more to borrow it is what the news said.

I kind of understand.. if you borrow $1 with an interest of 10% now you payback $1.10, but the feds raised interest so now the interest is 20% and now they pay back $1.20.. interest rates fluctuate all the time. So i don’t really get it, but all banks work like this.. so unless they do someyhing to prevent a closure it will happen

[abc3643]

Not much to be concerned about.
The only bank that ultimately matters is The United States Treasury.

[abc3643]

Instead of adding to my answer in your other question,
To return all the rights and profits from the creation of money to the citizens, should the Federal Reserve be abolished? ↗
I, instead, will add to this one.

This collapse of Silicon Bank in California and that of Signature Bank in New York are two examples of WHY the Federal Reserve was created in 1913; to stave off "bank panics" and prevent the financial system from collapsing.

This is from the New York Times within the past hour. (It is not quite 10:30 AM EDT / 14:30 UTC.)
=================

Here’s what to know about the fallout from Silicon Valley Bank’s collapse.

The stunning collapse of two banks in the span of three days prompted President Biden on Monday morning to reassure Americans than the U. S. banking industry was safe, saying that customers’ deposits will “be there when you need them.”

Mr. Biden said his administration had taken swift action to contain the damage from the collapse of Silicon Valley Bank, a once-obscure lender that focused on business customers, including start-ups throughout the tech sector.

(more)

[abc3643]

Officials on Sunday announced that depositors with money at the California bank, which was closed by state regulators on Friday, would be paid back in full and be able to start accessing their money on Monday morning. They also disclosed that another lender, Signature Bank, had been shuttered by New York regulators and that its depositors would also be made whole.

Here’s what you need to know:

* In another effort to calm panicked bank investors and customers, some of whom have warned they might be unable to pay employees or contractors, the Federal Reserve announced that it would set up an emergency lending program, with approval from the Treasury, to funnel funding to eligible banks and help ensure that they are able to “meet the needs of all their depositors.”
...

[Anonymous]

It already has. All my Financials gains this year got wiped out in 2 days.

For everyone else. It all comes down to whether people create more of a problem with continued panic.