Jul 17, 2023
Elizabeth Lopatto
“With Signature and Silvergate basically shutting their doors, these balances had to go somewhere.”
The last crypto bank standing is Customers Bank Corp, a “super community” bank that would prefer we’d all stop calling it a crypto bank, please.
Mar 21, 2023
Elizabeth Lopatto
Loans to insiders at SVB “more than tripled” to $219 million in the last three months of 2022.
The loans increased as the bank began looking weaker, Bloomberg reports.
In its most-recent proxy statement, SVB Financial Group, the parent company of Silicon Valley Bank before its collapse, said it made loans last year to related parties including “companies in which certain of our directors or their affiliated venture funds are beneficial owners of 10% or more of the equity securities of such companies.”
Mar 21, 2023
Elizabeth Lopatto
Is the Fed even functioning?
The Fed was focusing on monetary policy when it was raising interest rates, says Peter Conti-Brown, a Wharton School expert on the Federal Reserve. But was it supervising places like Silicon Valley Bank to see what the outcome of that policy was?
Mar 17, 2023
Elizabeth Lopatto
Credit rating firms fell down on the job, again.
Hey, remember the phrase “structured by cows” from the aftermath of the 2008 financial crisis? I think about it once a week, no reason.
Anyway! When Signature and Silicon Valley Bank collapsed, they were both highly-rated by credit ratings agencies.
Mar 17, 2023
Elizabeth Lopatto
When it came to Silicon Valley Bank, Fed monitors fell down on the job.
A year before the collapse, a senior team of Fed examiners started telling SVB about its problems, Bloomberg reports. But by then it was already late in the game. It had been the fastest-growing bank in the nation for five years, but apparently this didn’t ring alarm bells.
Silicon Valley Bank went broke, but not because it was woke
Illustration by Hugo Herrera / The Verge
The culture war has come for the banks, and friends, it is stupid.
There are a wide variety of proposed explanations for the fall of Silicon Valley Bank. For instance, The Wall Street Journal’s editorial page has suggested SVB’s board “may have been distracted by diversity demands” as I guess it had too many women, too many Black people (one), too many queer people (again, one), and too many veterans (???).
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Mar 15, 2023
Elizabeth Lopatto
The Silicon Valley Bank fallout is just beginning
Illustration by Hugo Herrera / The Verge
Following the collapse of Silicon Valley Bank last week, a lot of companies and entrepreneurs have been making the flight to — at least perceived —safety. That means the biggest banks have been getting more deposits: JPMorgan Chase, Bank of America, Citigroup, and Wells Fargo.
“Everyone is asking, ‘Where should we bank? Where is it safe to bank?’” Ryan Gilbert, founder of Launchpad Capital, told Silicon Valley Business Journal. “When you think you bank with the safest bank in your ecosystem, and they disappeared overnight, you realize it’s impossible to predict an earthquake.” He moved his account to Chase.
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Mar 14, 2023
Elizabeth Lopatto
Would you like to see some music videos made by a failed bank?
FT Alphaville rounds up the Signature Bank music videos.
Yes, that’s right. In addition to loans, Signature made music videos. This seems weird until you remember that it’s one of two banks that heavily serviced Broadway productions —so they’re meeting their customers where their customers are, I guess.
The Signature Bank musical universe
[FinancialTimes]
Mar 14, 2023
Elizabeth Lopatto
It is, at minimum, bad optics to sell a bunch of your shares before your bank collapses.
And so now the federales are looking into stock sales made by Silicon Valley Bank’s leadership before the bank failed.
Mar 14, 2023
Elizabeth Lopatto
Smells like crisis PR!
Axios got some details on Peter Thiel’s Founders Fund and its decision to advise portfolio companies to pull funds from the troubled Silicon Valley Bank.
The story assures us that Thiel wasn’t “part of the conversation” and that Founders Fund told “LPs that this was all about prudently protecting their investments.”
Mar 13, 2023
Elizabeth Lopatto
The tech industry moved fast and broke its most prestigious bank
The Verge
On the last night of its existence, Silicon Valley Bank was hosting VC Bill Reichert of Pegasus Tech Ventures, who was giving a presentation on “How to Pitch Your WOW! to Investors” to about 45 or 50 people. Mike McEvoy, the CEO of OmniLayers, recounted the scene for me. “It was eerie over there,” he said. He saw a number of people exiting the building during the event, looking subdued.
Roger Sanford, the CEO of Hcare Health and a self-described “professional Silicon Valley gadfly,” was also there. “Everyone was in denial,” he told me. “The band played on.”
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Mar 13, 2023
Richard Lawler
The FDIC is going to try and auction off Silicon Valley Bank again.
That didn’t quite work out on Sunday, but the Wall Street Journal reports officials told senators they have “additional flexibility” to make a deal now that the bank’s collapse has been deemed a threat to the financial system.
The move also gives regulators the ability to offer would-be buyers deal sweeteners such as loss-sharing agreements, according to former regulators.
While none of the largest U.S. banks bid on SVB during a failed auction on Sunday, at least one offer was made by another institution, but it was declined by the FDIC, officials told lawmakers on Monday.
Mar 13, 2023
Makena Kelly
President Joe Biden says Silicon Valley Bank deposits will “be there when you need them.”
It’s the promise the president made to depositors in a speech at the White House on Monday. Throughout his brief remarks, Biden also reassured viewers that no taxpayer money would be used to bail out the bank.
The speech followed a Sunday announcement from the government’s top banking regulators that they were setting up an emergency lending program to ensure all SVB depositors are made whole.
Mar 12, 2023
Elizabeth Lopatto
Signature Bank is closed by regulators, the third US bank failure in a week
Illustration by Alex Castro / The Verge
Signature Bank, one of the two big US destinations for crypto companies, has been closed by New York regulators. “All depositors of this institution will be made whole,” the Treasury, Federal Reserve and Federal Deposit Insurance Corporation said in a joint statement.
This is the third major bank that has fallen in the space of a week, and investors are spooked. The joint announcement that depositors will be protected above the $250,000 guaranteed by the FDIC appears to be meant to reassure banking customers that their money will not be frozen. Signature had $88.59 billion in deposits as of December 31, 2022. The New York Department of Financial Services has taken possession of the bank.
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Mar 12, 2023
Emma Roth
Etsy is delaying seller payouts following Silicon Valley Bank’s collapse
Illustration by Alex Castro / The Verge
Etsy says some sellers won’t receive their payments on time due to the sudden collapse of Silicon Valley Bank. In an email sent out to impacted shop owners, the company says it used the shuttered institution to send out deposits to “some sellers” and that they may not get their scheduled payments as a result, leaving shop owners worried about the future of their stores.
Etsy started notifying sellers about the potential delays on Friday, the same day the Federal Deposit Insurance Corporationand California regulators shut down Silicon Valley Bank. The bank served as a staple in the venture capital and startup industries, with companies like Etsy, Roku, and Roblox having funds tied up in the institution. The FDIC auction for the Silicon Valley Bank’s assets is expected to take place on Sunday afternoon, and if no buyer emerges, the FDIC will be forced to sell its assets in an attempt to reimburse depositors.
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Mar 12, 2023
Emma Roth
A federal bailout isn’t in the cards for Silicon Valley Bank, but deposits are safe.
Depositors will be paid back in full and can access their money starting Monday morning, officials said. In an interview on Face the Nation, US Treasury Secretary Janet Yellen ruled out a government-backed bailout:
During the financial crisis, there were investors and owners of systemic large banks that were bailed out. And the reforms that have been put in place means that we’re not going to do that again. But we are concerned about depositors and are focused on trying to meet their needs.
Mar 10, 2023
Mitchell Clark
Roku signals Silicon Valley Bank distress.
The company told the SEC that it had $487 million, around 26 percent of its cash, held with Silicon Valley Bank, which folded today. It also said it’s unsure about how much of that it’ll get back — a common concern among firms that banked there, especially with payday looming.
[www.sec.gov]
Mar 10, 2023
Richard LawlerandElizabeth Lopatto
Panic! At the bank.
Silvergate is gone. The FDIC took over Silicon Valley Bank. Several other banks have lost billions in value, and it’s unclear whether a number of tech companies will be able to keep operating while all of this gets figured out.
If you’re unclear why our situation is the way it is, go back and take a look at Liz Lopatto’s article from a few weeks ago about interest rates and what they mean for tech companies right now.
Less money and more fear: what’s going on with tech
Elizabeth Lopatto
Mar 10, 2023
Richard Lawler
Silicon Valley Bank has failed
Image: Getty Images
Within hours of reports that Silicon Valley Bank was considering a sale after it failed to raise enough money to keep going, state and federal banking regulators shut it down. In an announcement from the Federal Deposit Insurance Corporation (FDIC), the agency said, “All insured depositors will have full access to their insured deposits no later than Monday morning, March 13, 2023.”
Silicon Valley Bank is important for venture capital firms and startups. But as the economy has changed, VC-funded companies burned through their available cash. Simultaneously, VC funding dried up. So Silicon Valley Bank’s deposits dropped faster than the bank anticipated.
Read Article >
Mar 10, 2023
Richard Lawler
Another tech bank is in deep trouble — but not because of crypto
Image: Michele Doying / The Verge
(Update 12:12PM ET: Federal and state regulators stepped in and shut down Silicon Valley Bank to protect insured deposits.)
Two days after Silvergate Bank announced its shutdown in a collapse with deep ties to problems with some of its crypto customers, Silicon Valley Bank is also struggling. Its stock price plunged more than 60 percent before trading was halted on Friday morning. It may sell itself — CNBC reports it’s now in talks to sell itself, and Reuters says that it’s “exploring options, including a sale.”
Read Article >
Jan 5, 2023
Richard Lawler
Silvergate Capital survived a post-FTX run on deposits, but now the crypto-focused bank’s stock is tanking.
Exactly one month ago, Silvergate’s CEO insisted things were ok, despite the problems with FTX, a major customer.
Today its Q4 filing reveals deposits from crypto customers shrank from $11.9 billion to $3.9 billion in three months, $150 million of the bank's deposits are held by customers who’ve filed bankruptcy, and it’s laying off 200 employees.
The company’s stock price is down 46 percent.
Dec 5, 2022
Elizabeth Lopatto
Silvergate: “We’re fine!”
Silvergate Capital, a famous crypto bank, has filed a letter with the SEC from its CEO, Alan Lane. Apparently, he is using it to correct what he terms “speculation — and misinformation — being spread by short sellers and other opportunists.”
Okay! Unfortunately for Lane, this question raises more questions than it answers, such as what his “extensive due diligence” on FTX and Alameda consisted of!
FAQs
What caused the 2023 Silicon Valley Bank collapse? ›
The collapse happened for multiple reasons, including a lack of diversification and a classic bank run, where many customers withdrew their deposits simultaneously due to fears of the bank's solvency. Many of SVB's depositors were startup companies.
What 3 major banks collapsed in 2023? ›Earlier last year Silicon Valley Bank failed March 10, 2023, and then Signature Bank failed two days later, ending the unusual streak of more than 800 days without a bank failure. Before Citizens Bank failed in November 2023, Heartland Tri-State Bank failed July 28, 2023 and First Republic Bank failed May 1, 2023.
Why did Signature Bank fail in 2023? ›Signature Bank was shut down by federal regulators on March 12, 2023. The bank's failure resulted from regulator concern about depositors withdrawing large amounts of money after the failure of Silicon Valley Bank (SVB) and the fear of continued contagion.
Why did SVB and Signature Bank collapse? ›The two banks clearly had poor management and governance. As deposits soared, SVB's executives had invested in long-term assets without hedging adequately against interest-rate risks, and the firm lacked a diversified portfolio of depositors, most of whom came from the venture-capital sector.
What happened to Signature Bank? ›Less than 48 hours after SVB failed, after witnessing a large run on customer deposits, Signature Bank was closed by the New York State Department of Financial Services and placed under the receivership of the Federal Deposit Insurance Corporation (FDIC).
Who is responsible for the Silicon Valley bank collapse? ›And the culprit in this case was the very institution whose mission is to prevent bank runs and systemic collapse: the Federal Reserve.
Which banks are collapsing in 2024? ›Republic First Bank's demise on April 26 was the first failure of 2024. Its collapse renewed fears that last year's financial instability is still lingering. Republic First Bank was shuttered last week by its state regulator and taken over by the Federal Deposit Insurance Corp.
How many US banks are in danger? ›Consulting firm Klaros Group analyzed about 4,000 U.S. banks and found 282 banks face the dual threat of commercial real estate loans and potential losses tied to higher interest rates. The majority of those banks are smaller lenders with less than $10 billion in assets.
Which is the safest bank? ›JPMorgan Chase, the financial institution that owns Chase Bank, topped our experts' list because it's designated as the world's most systemically important bank on the 2023 G-SIB list. This designation means it has the highest loss absorbency requirements of any bank, providing more protection against financial crisis.
How big is the Signature Bank failure? ›SBNY was the 29th largest bank in the country, and its failure constituted the third largest bank failure in United States history. As of March 19, 2023, the FDIC estimated the cost of SBNY's failure to the DIF to be approximately $2.5 billion.
What is the future of Signature Bank? ›
Signature Bank, New York, NY (“Signature”) was closed on March 12, 2023 by the New York Department of Financial Services, and the Federal Deposit Insurance Corporation (“FDIC”) was appointed as receiver.
Should I take my money out of the bank in 2023? ›In short, if you have less than $250,000 in your account at an FDIC-insured US bank, then you almost certainly have nothing to worry about. Each deposit account owner will be insured up to $250,000 - so, for example, if you have a joint account with your spouse, your money will be insured up to $500,000.
Who owns SVB now? ›It's under new management, and now owned by North Carolina-based First Citizens Bank, which bought its deposits and branches out of bankruptcy weeks after SVB crumbled in March 2023.
Is SVB bank still operating? ›Silicon Valley Bank (SVB)—the 16th largest bank in the United States—was shut down by federal regulators on March 10, 2023. In the aftermath of the collapse, federal regulators promised to make all depositors whole, even for those funds that weren't protected by the Federal Deposit Insurance Corporation (FDIC).
Did people lose money in SVB collapse? ›To be sure, SVB was allowed to fail and shareholders are projected to lose $850 million collectively. But both insured depositors — with up to $250,000 in the bank — and uninsured depositors will not lose money.
What is the bank scandal 2023? ›The year also brought the demise of crypto-friendly Silvergate Bank — in what was a voluntary self-liquidation rather than a failure — and the failure of Heartland Tri-State Bank after its CEO reportedly fell victim to a crypto scam . In all, five banks failed, the most in a single year since 2017.
What caused the recent bank failures? ›Since 2001, there have been 566 bank failures, with a significant spike during the 2008 financial crisis and ensuing Great Recession. Key causes of bank failures are undercapitalization, real estate lending vulnerabilities, interconnectedness allowing the crisis to spread, lack of diversification and rapid growth.
What did President Biden say about the Silicon Valley bank collapse? ›Silicon Valley Bank collapse: Biden urges calm, says banks' leaders are fired : NPR. Silicon Valley Bank collapse: Biden urges calm, says banks' leaders are fired President Biden also said insiders and investors won't be bailed out, but that companies that used the bank will be able to pay their employees and bills.
Did people lose money from Silicon Valley Bank collapse? ›To be sure, SVB was allowed to fail and shareholders are projected to lose $850 million collectively. But both insured depositors — with up to $250,000 in the bank — and uninsured depositors will not lose money.