The collapse of the Silicon Valley Bank (SVB) (min. US$ 212 billion) unsettles Americans. The first bank runs have begun. After all, it’s the biggest bank collapse in the United States since Lehman Brothers and the 2008/2009 financial crisis. How bad is it going to get? The second bank closure provides an indication – Signature Bank (min. US$ 110 billion), which focuses on crypto transactions, has now also been closed by the authorities.
With the ongoing interest rate hikes, the US Federal Reserve is increasingly putting the banks under pressure. The collapse of the Silicon Valley Bank (SVB) – which was placed under the supervision of the Federal Deposit Insurance Corporation (FDIC) last Friday – is arguably just the beginning. The weakest link in the chain broke, and the Signature Bank was followed by the next. Banks that are closely related to her are now faced with long queues of customers who want to withdraw their money. As Report24 reported, the left-wing Woke ideology could also be behind the major bankruptcies, because the banks cared more about diversity, homosexuality and political correctness than about their core business (see: Gigantic US bank crash caused by various left-wing activists).
Shades of 1930’s. This is my bank in Wellesley this morning. Boston Private Bank, recently acquired by Silicon Valley Bank. Ruh, roh. pic.twitter.com/MAD46ozShx
— Lawrence Lepard, "fix the money, fix the world" (@LawrenceLepard) March 10, 2023
US Treasury Secretary Janet Yellen tried to calm things down. Regulators would work to find a solution for the SVB and focus on depositors. The former Fed Chair also claimed that the US banking system is well capitalized and resilient. She said authorities are “working to resolve this situation in a timely manner.”
Bankrun in the US #SVB pic.twitter.com/HbMmR2dLge
— marc friedrich (@marcfriedrich7) March 11, 2023
The problem with this: Of the $173 billion in customer deposits (as of the end of 2022), $152 billion were not covered by the deposit insurance. This includes deposits of more than $250,000.
I’ve never seen a bank run in Brentwood Los Angeles in over 40 years — this is at first republic bank branch. People standing in rain pic.twitter.com/k31PqqpyO3
— pjb.eth (@Dr_PhillipB) March 11, 2023
However, many other US banks are also struggling with their balance sheets (and the “net unrealized losses” hidden on the books). Sooner or later this will lead to major problems and trigger further bank crashes. The only question is: how badly will this affect the European banking landscape? The opening of the US stock exchanges, which will take place at 3:30 p.m. Central European Time, will provide the first clues.
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