Size of bank failures since 2000.
Here is an excellent explanation of how this happened by the great @profstonge!
Silvergate bank has also collapsed. Silvergate was a major investor for many crypto firms and their collapse has started a sharp decline in crypto markets as investors are spooked.
Silicon Valley Bank, Management Team:
1. CEO: Director at San Francisco Fed
2. CFO: Former analyst at Freddie Mac
3. Chief Admin Officer: Former CFO of Lehman Brothers
4. Chief Risk Officer: Led credit ratings in 2007
5. Chief Legal Officer: General Counsel at Citibank in 2008
Just for context, SVB is equivalent to just 4% (1/25) of the banks that failed during the 2008 global financial crisis, but is holding the equivalent of 55.9% of the total assets those banks represented.
SVB sold approximately $21 billion of securities which resulted in an after tax loss of approximately $1.8 billion
97.3% of SVB’s deposits are above $250k and not FDIC insured.
26% of Roku’s cash is held with SVB.
It is a fact that SVB invested heavily into companies that were willing to engage in DEI practices and placed importance on ESG scores.
Treasury Secretary Janet Yellen has just made the statement that there will be no bailout for SVB or it’s investors.
Seems like the Treasury and the Fed have their wires crossed.
Banks need to make money just like any other business. FDIC insurance and bailouts actually encourages them to take more risk with clients’ money. Almost all banks today are fractional reserve, this means they only keep a fraction of the money deposited into them, the rest is… twitter.com/i/web/status/1…
Updating this thread to include the recent failure of Signature Bank.
Just like SVB, a majority of Signature’s accounts are uninsured business accounts.
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