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FDIC Takes over Silicon Valley Bank

fdic.gov

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Re: FDIC Takes over Silicon Valley Bank

#71

Post by ejstronge »

briandear wrote: post #61
ejstronge wrote: post #48

Earlier quoted context omitted.

>Keep in mind 93% of SVB's assest were not FDIC insured. >> Silicon Valley Bank Had About $209.0B in Assets I'm not an expert, but aren't deposits in a bank liabilities ? Assets are things like treasury bills and loans held by the bank.

When someone opens a bank account and makes a cash deposit, he/she surrenders the legal title to the cash, and it becomes an asset of the bank.

> When someone opens a bank account and makes a cash deposit, he/she surrenders the legal title to the cash, and it becomes an asset of the bank.

I think this is Google's first hit when one searches this, but I do not believe this is correct. Here is a source saying the opposite, as an example.

A liability, in general terms, is something owed to another (e.g., a deposit)

https://courses.lumenlearning.com/wm-macroeconomics/chapter/...

And another more reputable source:

https://www.investopedia.com/terms/b/bank-deposits.asp

Re: FDIC Takes over Silicon Valley Bank

#72

Post by ncallaway »

albatross13 wrote: post #29
FormerBandmate wrote: post #8

Turns out Twitter making bank failure a meme didn’t really help anything at all. It’ll be very interesting to see what happens to uninsured depositors

Probably a dumb question, but what determines if a deposit is insured or not at an FDIC insured bank?

Deposits > $250k per depositor per bank are uninsured.

https://www.fdic.gov/resources/deposit-insurance/faq/

Re: FDIC Takes over Silicon Valley Bank

#74

Post by JumpCrisscross »

FormerBandmate wrote: post #66
mkmk wrote: post #2

Oldie but goodie on what actually happens when a bank is taken over. https://www.npr.org/2009/03/26/102384657/anatomy-of-a-bank-t...

This case is unique because of the sheer volume of non-FDIC insured deposits. Substantial risk of depositors not being made whole for a while, they’ll probably get all their money but it will still be bad

> Substantial risk of depositors not being made whole for a while

Emphasis on for a while. Stock and bond holders (man, did the latter miss the ball) will absorb losses.

Re: FDIC Takes over Silicon Valley Bank

#75

Post by khazhoux »

idlewords wrote: post #38

Now we just need an "incredible journey" blog post from SVB spinning this acquisition as a great win for both customers and investors.

Or a cute 404 page when you login to your account:

"Oops, looks like Santa misplaced his bag with all your money! Don't worry, his elves are busy looking for it all over the North Pole."

Re: FDIC Takes over Silicon Valley Bank

#77

Post by briandear »

woeirua wrote: post #52

LMAO. Can't even believe how many people were confidently asserting that nothing was wrong yesterday. If you had more than $250k in SVB yesterday you probably just took a huge haircut. Hundreds of startups will become illiquid as a result of SVB's collapse, and there will be major layoffs here in the next 90 days as founders realize that they lost their funds and cannot raise in the current VC environment.

I bet a lot of VCs had significant money in that bank as well. Even if companies could raise money, there wouldn't be as money available.

Re: FDIC Takes over Silicon Valley Bank

#78

Post by pastor_bob »

NordSteve wrote: post #5

Only 3% of deposits in the bank are FDIC insured; other depositors will need to wait for the receivership process to run to get access to (what remains) of their deposits. edit: replace "bankruptcy" with "receivership" as the latter is usually a faster process than the former.

Bill Ackman and Wall Street calling for a government bailout for all depositors:

https://twitter.com/BillAckman/status/1634032841687285761

Re: FDIC Takes over Silicon Valley Bank

#79

Post by alwaysbeconsing »

rekttrader wrote: post #25
tarr11 wrote: post #16

Earlier quoted context omitted.

Does this mean that SVB customers are going to lose deposits over the FDIC limit (250k?)

For now yes, you get a note on what’s owed that remains and in time you get some of your money back post bankruptcy. Keep your accounts lower than 250k

> Keep your accounts lower than 250k

For full precision, if you're concerned about this, be aware that it's 250K per depositor at a given bank, rather than per account. That is, all your qualifying accounts at the bank are considered as one pool and 250K of that is insured. More detailed information, including how joint accounts are handled, here: https://www.fdic.gov/resources/deposit-insurance/financial-p...

Re: FDIC Takes over Silicon Valley Bank

#80

Post by NordSteve »

jb1991 wrote: post #54
NordSteve wrote: post #5

Only 3% of deposits in the bank are FDIC insured; other depositors will need to wait for the receivership process to run to get access to (what remains) of their deposits. edit: replace "bankruptcy" with "receivership" as the latter is usually a faster process than the former.

> Only 3% of deposits in the bank are FDIC insured why is that?!

Because most of their depositors were business that kept >$250K (the insurance limit) in the bank.
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