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FDIC Takes over Silicon Valley Bank

fdic.gov

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Re: FDIC Takes over Silicon Valley Bank

#171

Post by banku_brougham »

matheusmoreira wrote: post #128
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.

If people have to be reassured to begin with, it's already over. Money only exists because people keep believing it does. As soon as they stop believing it's gone.

That gummint fiat money looking better all the time.

Re: FDIC Takes over Silicon Valley Bank

#172

Post by hef19898 »

johnbellone wrote: post #91
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.

The same people that were saying that yesterday were removing their deposits. They just wanted to be there first.

There are three ways to succeed in this business: Be first, be smarter or cheat. And I don't cheat.

Margin Call is such a timeless, great movie!

Re: FDIC Takes over Silicon Valley Bank

#173

Post by nnx »

But I thought only crypto was risky? And that over-regulated bank sector was totally safe?

Imho, this is a great argument for the return of Free banking (including crypto) as we see time and again that regulations do not work. Fail early and fast, let the market innovate and pick its winners and losers.

Re: FDIC Takes over Silicon Valley Bank

#174

Post by prasadjoglekar »

vineyardmike wrote: post #127
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.

> If you had more than $250k in SVB yesterday you probably just took a huge haircut. You may not lose money. The money isn’t gone yet. The restructuring may save the money. There’s a playbook for this sort of thing.

You most definitely will. SVB already fire-sold 21Bn in MBS and took a 1.8Bn loss on that. Someone is eating that loss....

Separately, this is going to cause a lot of finance vultures to look at other banks who also have MBS portfolios on their books. The show's only beginning.

Re: FDIC Takes over Silicon Valley Bank

#176

Post by bombcar »

gumby wrote: post #161

I suspect all depositors will be made whole. The bank had a liquidity crisis; it had reserves in excess of its liabilities. Every bank borrows short term (you can walk up and withdraw your money at any time) but lends long (e.g. mortgages, though SVB writes few of those). The recent management grabbed some very long federal bonds; as rates have risen the resale value of those long term assets (paying a lower interest…

The thing that's strange is FDIC took control and setup a receiving bank for liquidation.

That's not normal; FDIC works quite hard to find a bank willing to take over - usually they can work out what the "cost" is to take over, and FDIC pays the receiving bank that amount to "eat" the dying one.

If they don't announce they have a bank to assume SVP by Monday, it's quite abnormal.

Re: FDIC Takes over Silicon Valley Bank

#177

Post by NordSteve »

It should not take too long to find out roughly what the uninsured depositors will receive. The investment portfolio is straightforward to liquidate. The loan portfolio will take a bit longer to sell, but it's a well-worn process. If you haven't read about Resolution Trust Corporation, it's worth a couple minutes -- this is how the assets of failed savings and loan companies were liquidated 40 years ago.

https://en.wikipedia.org/wiki/Resolution_Trust_Corporation

Re: FDIC Takes over Silicon Valley Bank

#178

Post by pclmulqdq »

katmannthree wrote: post #76
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...

Are clawbacks a thing in this case for the people who did get [some] of their money out in time?

Clawbacks are only poised to happen for big crypto failures (FTX) because the people who held money in those institutions aren't technically "depositors," and are considered a more generic type of creditor (which has a bankruptcy clawback).

Bank deposits are special and there will be no clawback. However, depositors who lost money will be first in line at the bankruptcy court.

Re: FDIC Takes over Silicon Valley Bank

#180

Post by [deleted] »

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.

[deleted]
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