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Ladybbird · 13-03-23, 08:09

Silicon Valley Bank Collapse: Causing Chaos For Tech Startups

Tech startups have been left without access to their money in the wake of Silicon Valley Bank's collapse.

Silicon Valley Bank UK: 'Either British Banks Save it or The Government Will sStep Up' - Bloomberg

US Government-Money in Failed US Bank is Safe

People and businesses who have money deposited with failed US bank Sillicon Valley Bank (SVB) will be able to access all their cash from Monday, the US government has said.

BBC 13 MAR 2023

A statement from the US Treasury, the Federal Reserve and Federal Deposit Insurance Corporation (FDIC) said depositors would be fully protected.

The taxpayer will not bear any losses from the move, the statement said.

SVB was shut down by regulators who seized its assets on Friday.

It was the largest failure of a US bank since the financial crisis in 2008.

The move came as the firm, a key tech lender, was scrambling to raise money to plug a loss from the sale of assets affected by higher interest rates.

"The US banking system remains resilient and on a solid foundation, in large part due to reforms that were made after the financial crisis that ensured better safeguards for the banking industry," the authorities' joint statement said.

"Those reforms combined with today's actions demonstrate our commitment to take the necessary steps to ensure that depositors' savings remain safe."

Those actions also apply to Signature Bank of New York, seen as the most vulnerable institution after SVB, which came under regulatory control on Sunday.

As part of their moves to restore confidence, regulators also unveiled a new way to give banks access to emergency funds.

The Federal Reserve said it would offer assistance through a new Bank Term Funding Program, making it easier for banks to borrow from it in a crisis.

President Joe Biden said the American people could have "confidence that their bank deposits will be there when they need them".

SVB was seen as a crucial lender for early-stage businesses in the tech sector. It was the banking partner for nearly half of US venture-backed technology and healthcare companies that listed on stock markets last year.

Analysis by James Clayton, North America Technology Reporter

I've been speaking to people with money stuck in SVB over the weekend.

One founder told me had been constantly refreshing his online banking page, hoping it might work.

Another said he was confident the government would step in, but admitted he might have lost about around 40% of the company's cash overnight.

This statement, then, has been welcomed by depositors. But there are those that will raise eyebrows at this move.

SVB mainly banked start-ups and venture capitalists in Silicon Valley - the tech elite. And those Silicon Valley elites tend to have more than a streak of libertarianism to their politics: the boilerplate view is that government is slow and too big.

Critics argue that it's with great irony that it's the government who has stepped in to save the day. Some will wonder whether influential tech bros have been given preferential treatment: capitalism for when things go well, socialism for when it doesn't.

It's why the statement is worded carefully that taxpayers will not be paying for this. Mr Biden will now have to defend the move - and reassure members of his own party that guaranteeing depositors was the only way.

SVB started as a California bank in 1983 and expanded rapidly over the last decade.

But it came under pressure as higher interest rates made it harder for start-ups to raise money through private fundraising or share sales.

In Silicon Valley, the reverberations from the collapse have been widespread as companies face questions about what it means for their finances.

Paul Ashworth, chief North America economist at Capital Economics, said the US authorities had "acted aggressively to prevent a contagion developing".

"Rationally, this should be enough to stop any contagion from spreading and taking down more banks, which can happen in the blink of an eye in the digital age. But contagion has always been more about irrational fear, so we would stress that there is no guarantee this will work," he added.

Meanwhile, an offer has been made for SVB's UK arm. A consortium of investors led by the Bank of London, a UK clearing bank, has submitted a formal bid to the UK Treasury.

The British government has been working on a plan to support UK tech firms affected by the collapse of SVB.

13-03-23, 08:09	#1
Ladybbird Join Date: Feb 2011 Posts: 47,612 Thanks: 27,636 Thanked 14,458 Times in 10,262 Posts Awards Showcase Total Awards: 8	Silicon Valley Bank Collapse: Affects Tech Startups & ALL Banks Silicon Valley Bank Collapse: Causing Chaos For Tech Startups Tech startups have been left without access to their money in the wake of Silicon Valley Bank's collapse. Silicon Valley Bank UK: 'Either British Banks Save it or The Government Will sStep Up' - Bloomberg US Government-Money in Failed US Bank is Safe People and businesses who have money deposited with failed US bank Sillicon Valley Bank (SVB) will be able to access all their cash from Monday, the US government has said. BBC 13 MAR 2023 A statement from the US Treasury, the Federal Reserve and Federal Deposit Insurance Corporation (FDIC) said depositors would be fully protected. The taxpayer will not bear any losses from the move, the statement said. SVB was shut down by regulators who seized its assets on Friday. It was the largest failure of a US bank since the financial crisis in 2008. The move came as the firm, a key tech lender, was scrambling to raise money to plug a loss from the sale of assets affected by higher interest rates. "The US banking system remains resilient and on a solid foundation, in large part due to reforms that were made after the financial crisis that ensured better safeguards for the banking industry," the authorities' joint statement said. "Those reforms combined with today's actions demonstrate our commitment to take the necessary steps to ensure that depositors' savings remain safe." Those actions also apply to Signature Bank of New York, seen as the most vulnerable institution after SVB, which came under regulatory control on Sunday. As part of their moves to restore confidence, regulators also unveiled a new way to give banks access to emergency funds. The Federal Reserve said it would offer assistance through a new Bank Term Funding Program, making it easier for banks to borrow from it in a crisis. President Joe Biden said the American people could have "confidence that their bank deposits will be there when they need them". SVB was seen as a crucial lender for early-stage businesses in the tech sector. It was the banking partner for nearly half of US venture-backed technology and healthcare companies that listed on stock markets last year. Analysis by James Clayton, North America Technology Reporter I've been speaking to people with money stuck in SVB over the weekend. One founder told me had been constantly refreshing his online banking page, hoping it might work. Another said he was confident the government would step in, but admitted he might have lost about around 40% of the company's cash overnight. This statement, then, has been welcomed by depositors. But there are those that will raise eyebrows at this move. SVB mainly banked start-ups and venture capitalists in Silicon Valley - the tech elite. And those Silicon Valley elites tend to have more than a streak of libertarianism to their politics: the boilerplate view is that government is slow and too big. Critics argue that it's with great irony that it's the government who has stepped in to save the day. Some will wonder whether influential tech bros have been given preferential treatment: capitalism for when things go well, socialism for when it doesn't. It's why the statement is worded carefully that taxpayers will not be paying for this. Mr Biden will now have to defend the move - and reassure members of his own party that guaranteeing depositors was the only way. SVB started as a California bank in 1983 and expanded rapidly over the last decade. But it came under pressure as higher interest rates made it harder for start-ups to raise money through private fundraising or share sales. In Silicon Valley, the reverberations from the collapse have been widespread as companies face questions about what it means for their finances. Paul Ashworth, chief North America economist at Capital Economics, said the US authorities had "acted aggressively to prevent a contagion developing". "Rationally, this should be enough to stop any contagion from spreading and taking down more banks, which can happen in the blink of an eye in the digital age. But contagion has always been more about irrational fear, so we would stress that there is no guarantee this will work," he added. Meanwhile, an offer has been made for SVB's UK arm. A consortium of investors led by the Bank of London, a UK clearing bank, has submitted a formal bid to the UK Treasury. The British government has been working on a plan to support UK tech firms affected by the collapse of SVB. __________________ PUTIN TRUMP & Netanyahu Will Meet in HELL ..................*SHARKS are Closing in on TRUMP*.......................... *TRUMP WARNS; 'There'll Be a Bloodbath* If I Don't Get Elected'..MAGA - MyAssGotArrested...IT's COMING** PLEASE HELP THIS SITE..Click DONATE & Thanks to ALL Members of ... 1.. THIS SITE IS MORE THAN JUST WAREZ...& TO STOP SPAM-IF YOU WANT TO POST, YOUR FIRST POST MUST BE IN WELCOMES

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