problems with American bank

[Vitamin c]

https://www.cnbc.com/2023/03/09/stock-m ... dates.html

https://www.reuters.com/business/financ ... 023-03-10/

https://www.standard.co.uk/business/sil ... 66456.html

Us bank closed after collapse.

[Vitamin c]

https://www.dailymail.co.uk/news/articl ... -back.html

More up to date information.

[GillyBee]

Definitely one to keep an eye on.It isn't the bank fail that is the disaster. It is the fall out that will cause the problems.

[Vitamin c]

I was under the impression that after the 2008 financial crash American and European banks were by law meant to put themselves through vigorous stress tests so it couldn't happen again , wasn't it sort of our guarantee that our money and mortgages are safe in a banking system that many didn't trust and withdrawn their cash from hence the huge rise in safe sales.

It will be interesting to see if we are able to what lead to this problem

My guess ..... greed.

[Frnc]

Quite a few Uk tech companies at risk from this apparently.

[Vitamin c]

Quite a few Uk tech companies at risk from this apparently.

Yes.
It's meant to be Britain's get out of jail card according to the press but if they can't pay their staff and suppliers problems ahead.

Any news on how or why the American end got into trouble.

[Vitamin c]

https://www.abc.net.au/news/2023-03-16/ ... /102105284

Things seem to be getting worse , the phrase credit crunch has been used .

[Mortblanc]

Any news on how or why the American end got into trouble.

The present situation seems to be case of someone failing their Business Finance 101 course.

SVB funded long term assets using short term money. That is not illegal, other than violating fiduciary responsibility, just stupid.

They had a raft of deposits that had to be invested, so they put them in nice safe bonds that were yielding next to nothing due to the stable economy.

When the FED raised interest rates it instantly put the bank under water since the rate hike was more than the bond yield.

Their start up customers began needing their deposits to pay their way due to the rate hike causing them stress. SVB had to sell a huge block of bonds at reduced price to cover their withdrawals.

The brokerage firm that used SVB as their financial link between the startups and the stock market saw the sale of the bonds and moved their business to another bank.

SVB went below their required deposit level within 24 hours and they were closed down by the banking regulators 24 hours latter. It was done automatically as one of the 2008 automatic safety measures.

They had gone from being the leading startup handler with hundreds of billions on deposit to broke in 48 hours.

SVB was not a normal bank. 97% of its customers were startup corporations. Almost no individual assets and most of the clients had far more than the $250,000 insured amount the government guarantees in their accounts.

[steptoe]

Any news on how or why the American end got into trouble.

The present situation seems to be case of someone failing their Business Finance 101 course.

SVB funded long term assets using short term money. That is not illegal, other than violating fiduciary responsibility, just stupid.

They had a raft of deposits that had to be invested, so they put them in nice safe bonds that were yielding next to nothing due to the stable economy.

When the FED raised interest rates it instantly put the bank under water since the rate hike was more than the bond yield.

Their start up customers began needing their deposits to pay their way due to the rate hike causing them stress. SVB had to sell a huge block of bonds at reduced price to cover their withdrawals.

The brokerage firm that used SVB as their financial link between the startups and the stock market saw the sale of the bonds and moved their business to another bank.

SVB went below their required deposit level within 24 hours and they were closed down by the banking regulators 24 hours latter. It was done automatically as one of the 2008 automatic safety measures.

They had gone from being the leading startup handler with hundreds of billions on deposit to broke in 48 hours.

SVB was not a normal bank. 97% of its customers were startup corporations. Almost no individual assets and most of the clients had far more than the $250,000 insured amount the government guarantees in their accounts.

Well i will say we have to use banks but we do not have to trust them we keep a bare min in our banks now and draw it out as and when we build any amounts , the reason for this is BANKS ARE SO CORRUPT i base this on the PPI scam i never knew about it and one day my nephew in law said to us about it because he knew i ran buildinf firms and so on back in the day , he said he would check out if we are owed for free and did and the next thing i got a letter from the bank saying we owe you money and then sent a cheque for a few thou so we figured matter closed they owned up and paid so move on 18 months i was in hospital wife came in gave me some letters and said read that the bank were saying oh we made a mistake we also owe you this and that and so on so i told her must be a scam leave it , next we get a recorded letter asking us to contact them hmmm so i call and speak to a lady who then tells me oh yes we owe you xyz so get another cheque with the lady calling once it came and sending a letter saying this is full and final payment ok so then fast forward 3 years we move north leave no forwarding and so on change banks and then i get a letter at the new address asking me to contact the old bank i figured to grovel to get us back but no i get told hi we have just checked our recorded and it appears we underpaid you on these accounts and we owe you so and so now i hmmmm at that and say yer ok it must be a scam but nope sure enough they sent the cheque we pay it in and then get a letter sorry for the mix up it is all now settled so on we go 6 months and yup we got yet another letter saying oh we forgot the loan you had on that account and we would like to offer to repay you the PPI you paid on it , like omg you could not write it so hence why i now do not trust banks any further than i can spit in to a force 9 gale lol .
sorry for the rant but like i said we now draw money out and will never trust a bank

[Vitamin c]

https://www.reuters.com/business/financ ... 023-03-25/

Another American bank in trouble looking for cash from the federal reserve.