Reaction & Commentary
Because in the 10th of March the Silicon Valley Bank shut down this remember was the second biggest banking failure in American history just behind the Washington Mutual which it collapsed during the 2008 financial crisis the financial Regulators in the United States told everyone to not panic but
You know what they say when State Regulators begin giving you advice in a public statement that people should not panic it means that the rot runs deep just two days after the collapse of the Silicon Valley Bank another American banking joined the new york-based Signature Bank sank
The signature bank had it sets to the tune of about 110 billion dollars it had deposits just deposits to the tune of nearly about 88.59 billion dollars the U.S state treasury Department has been at pains to try and reassure the public that no losses will be borne by the
Taxpayer pay attention to the word it says no losses will be borne by the taxpayer it does not talk of the people who’ve deposited their money in these Banks now what happens to those who have deposited their money in the bank because according to the December 2022 regulatory filings at
This moment and we’re talking of the United States 85 percent of all deposits in American banks are uninsured and here’s the interesting bit according to The Regulators deposited silica depositors of the Silicon Valley Bank and the Signature Bank whose Holdings exceed about 250 000 dollars will be able to access their
Money from Monday but remember this businesses function on the free flow of cash and if you can’t access funds to pay for your orders and to pay for salaries this will of course have will have a serious impact on how companies can function the crisis in the American banking
System at this time is so acute that even president Barton has been forced to make a public statement his administration is now promised to do whatever it takes to stop a domino effect to reassure investors about the health of banks around the world listening to the American president
I want to briefly speak about what’s happening in Silicon Valley Bank and Signature Bank today thanks to the quick action of my Administration over the past few days Americans can have confidence that the banking system is safe your deposits will be there when you need them small businesses across the country that
Deposit accounts that these Banks can breed easier and knowing they’ll be able to pay their workers and pay their bills and the hard-working employees can breathe easier as well last week when we learned of the problems of the banks and the impact they could have on jobs of small
Businesses and banking systems overall I instructed my team to act quickly to protect these interests they’ve done that this is no ordinary crisis which has struck the American banking system the high interest rates mean that operational costs and Loan Servicing costs have gone up tremendously and this
Has squeezed profit margins and in many cases is also prevented businesses that have taken loans from breaking even with the Silicon Valley Bank headquartered in California collapsed it wiped off a 100 billion dollars in terms of Market valuation of U.S banks The Crisis began with of course losses by
Businesses who are struggling to make profits due to the high interest rates when the depositors got wind of this problem they triggered a bank run but guess who the real villains of the Silicon Valley Bank collapse actually are Believe It or Not Silicon Valley actually dealt in giving out loans to a
Lot of startups now the people who decided to short the Silicon Valley Bank when its share started to collapse were Venture capitalists who decided to make money by shorting the Silicon Valley stocks the Silicon Valley Bank focused its businesses on learning to startups Venture capitalists often relied on the
Silicon Valley Bank to invest in startups to make their profits but when the Silicon Valley bank was down they are said to be one of the first to have shorted it nothing as they say should come in between making a good profit the New York headquartered Signature
Bank had had private clients in places such as Connecticut California Nevada and North Carolina it had exposure in sectors such as commercial real estate and also digital asset banking but most important for all and especially this is relevant if you have any exposure in the cryptocurrency
Market the fact is almost a quarter of the deposits in the Signature Bank were from the cryptocurrency sector so how will this banking crisis shape the global economy in the next few weeks is something that all Financial pundits will be watching with butterflies in their stomachs Beyond is now available in your country
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