Silicon Valley Bank (SVB) allowed customers to access deposits
The Silicon Valley Bank, a key lender to US startups since the 1980s, which collapsed on Friday last, allowed its customers to access their deposits from today. Some startup CEOs said the bank's website was slow to respond, perhaps due to huge traffic around the time it gave customers access to deposits. "All insured depositors will have full access to their insured deposits...The FDIC will pay uninsured depositors an advance dividend within the next week," the Federal Deposit Insurance Corporation (FDIC) said in a statement. Indian startups whose money is stuck in SVB are likely to withdraw their funds if they can.
Here are the Highlights on Silicon Valley Bank (SVB):
"Angry And Scared": Regret In Silicon Valley After Bank Fails
The nearly overnight collapse of Silicon Valley Bank has left the US tech scene in shock, wondering how one of its most valued institutions could vanish so suddenly, shunned by the companies that used it most. SVB, like many other niche banks around the world, was a highly specialized lender with specific idiosyncrasies -- and its one-track focus could have been its undoing.
E-Commerce Feels The Squeeze Of SVB Collapse
Etsy on Monday resumed payments to merchants with Silicon Valley Bank accounts after the e-commerce platform paused their payouts over the weekend following the U.S. government shutdown of the bank last week. Approximately 0.5% of Etsy's active sellers -or around 2,700 merchants- had their payments delayed on Friday related to SVB's collapse, according to Etsy.
Japan Banks Hit As SVB Contagion Fear Rattles Markets
Asia's share markets slid on Tuesday, with Japan's financial stocks leading losses as fear of a US banking crisis gripped investors ahead of crucial inflation data due later in the day. Fallout from the collapse of US lenders Silicon Valley Bank and Signature Bank widened overnight, despite government efforts to shore up confidence.
Customers Calm At Under-Pressure US BanksCustomers of under-pressure US banks said Monday they were reassured after authorities stepped in to protect deposits, even as markets fretted about systemic contagion. A few dozen account holders waited outside a San Francisco branch of stricken SVB -- which was seized by regulators on Friday after it collapsed, but there was no evident panic.
Canada's Tech Start Ups Face Financing Hurdles With SVB Collapse
Last week's sudden collapse of Silicon Valley Bank (SVB) could choke funding for Canada's technology start-ups and place them in the hands of domestic lenders who may be more selective in financing new ventures, financiers told Reuters.
That would be bad news for a sector that took a beating in 2022, which has made investors more risky averse in early stage investments.
"I would say this is probably the worst possible time (for this to happen) in the last decade because of the tech pullback we've had," said Neil Selfe, CEO at advisory INFOR Financial.
Federal Reserve To Probe Regulation Of SVB After Bank's Failure
The Federal Reserve said Monday it is launching a review of the supervision and regulation of Silicon Valley Bank, following SVB's rapid collapse.
US authorities pulled the plug on SVB last Friday, marking America's biggest banking failure since the 2008 financial crisis and raising fears of potential spillovers across the banking system.
The review will be led by Fed Vice Chair for supervision Michael Barr, and this will be released by May 1, the Fed said in a notice.
Fed Vice Chair Barr To Lead Review Of SVB Regulation
Federal Reserve Vice Chair Michael Barr will lead a review of the supervision and regulation of Silicon Valley Bank "in light of its failure," the central bank announced Monday.
"The events surrounding Silicon Valley Bank demand a thorough, transparent, and swift review by the Federal Reserve," said Fed Chair Jerome Powell, according to the statement. The review will be publicly released by May 1.
Did The Fed's Rate Hikes Play A RoleThe Fed and other central banks worldwide have been hiking interest rates since last year to contain decades-high inflation. This helped several lenders post healthy profits for 2022, but the higher rates have also lowered the value of bonds bought by banks when they had lower returns. SVB collapsed after it took a loss of $1.8 billion in the sale of $21 billion worth in securities.
French Minister Tells Investors To "Calm Down"France's Finance Minister Bruno Le Maire told investors on Monday to "calm down" after stocks in French banks including Societe Generale and BNP Paribas sank following the collapse of US lender Silicon Valley Bank. "Calm down, calm down, and just have a look at the reality. The reality is that the French banking system is not exposed to the SVB," Le Maire told reporters in Brussels. (AFP)
Joe Biden's Televised Remarks On SVB's Collapse
President Joe Biden on Monday reassured Americans that their banking system is safe in the wake of the sudden collapse of SVB and the federal takeover of a second bank. "Americans can have confidence that the banking system is safe. Your deposits will be there when you need them," he said in televised remarks from the White House.
Joe Biden On SVB Saga
In his latest address, US President Joe Biden said on the SVB saga: customers will have access to money; no losses will be borne by customers; no one is above the law, and the US Congress will be asked to strengthen banking rules.
Joe Biden On US Banking System's SafetyUS taxpayers will not be responsible for losses from any failed bank, says Joe Biden after Silicon Valley Bank collapsed on Friday.
Joe Biden's Latest Address On SVBUS President Joe Biden said Americans can have confidence in US banking system's safety amid concerns after the collapse of Silicon Valley Bank (SVB).
Concerns Over Financial Fallout Of SVB's Collapse
Ahead of Thursday's gathering, ECB policymakers will be closely watching the market turmoil sparked by the failure of US lender SVB last week, which saw European bank shares plunge on spillover fears. Concerns about the financial fallout from rising rates could see the ECB opting for smaller hikes after Thursday "to take some pressure off", said Baader Bank analyst Robert Halver. "The over-indebtedness is far too high and higher interest rates could leave debtors vulnerable," he told AFP.
Indian Firms Hit By Key US Bank Collapse? Yes And No, Startup CEO ExplainsNazara Technologies chief executive Nitish Mittersain told NDTV at least Rs 64 crore of two of its subsidiaries are stuck with SVB. He said everyday business is not affected as Nazara has over Rs 600 crore apart from the impacted funds. "But I can understand many startups in the tech space in the US and India bank with SVB as their primary bank... Younger companies would have cash flow issues, issues with the payroll after cash suddenly disappears," he told NDTV.
Australian Tech Firms Say Have No Material Exposure To SVB
Several Australian and New Zealand tech firms said on Monday they did not have material exposure to Silicon Valley Bank following the failure of the US startup-focused lender SVB Financial Group last week.
SVB Jitters Fuel Uncertainty As ECB Eyes Next Rate Hike
The European Central Bank is poised to raise interest rates again on Thursday to tackle inflation, but the sudden collapse of the US lender Silicon Valley Bank (SVB) has fuelled concern about the health of the banking system as borrowing costs climb higher.
Startups Must Find Ways To Survive: Singapore OfficialThe collapse of the US-based Silicon Valley Bank (SVB) will create a gap in the startup ecosystem and the budding entrepreneurs will have to find ways to 'survive the winter', Singapore Monetary Authority Chief Fintech Officer Sopnendu Mohanty said on Monday.
No Threat To Financial Stability After SVB Collapsed: GermanyGermany's finance watchdog said on Monday the collapse of the Silicon Valley Bank (SVB) in the United States posed no financial threat in Germany, amid market jitters over contagion fears. "The distressed situation of Silicon Valley Bank Germany Branch does not pose a threat to financial stability," the Federal Financial Supervisory Authority (BaFin) said, because it "has no systemic relevance".
BaFin added it had ordered a "moratorium" on the bank's German branch, which it said did not offer bank deposit services in the country. The total assets of the Frankfurt-based SVB branch amounted to just under 790 million euros ($843 million) at the end of 2022, BaFin added.
Cryptocurrencies Stabilise After US Intervenes On SVB
Major cryptocurrencies stabilised on Monday after US authorities announced plans to limit the fallout from the collapse of Silicon Valley Bank (SVB) and the issuer of the USD Coin stablecoin said it remained redeemable with the dollar.
US Fed's Plans To Get ComplicatedThe SVB crisis will complicate the Fed's plans to further hike interest rates as it struggles to rein in inflation, with investors now expecting it will lift them just 25 basis points at its next meeting, rather than the 50 points tipped last week. "The Fed is now in question over even a 25-point hike at the next meeting," Strategic Alpha analyst Maurice Pomery told AFP. "The issue for me is that many businesses were constructed on zero interest rates, leverage and debt model -- which with rising rates is no longer viable," he warned.
SVB Sends Shockwaves
The SVB crisis has sent shockwaves worldwide, with traders on red alert over any more bank failures. "Markets... could continue to be volatile throughout the week as a major domino effect could cause widespread risk-off moods leading to further losses for stocks and riskier assets," said XTB analyst Walid Koudmani. SVB is the largest retail bank to fall since the 2008 financial crisis.
"Weakest link""Far from calming nerves, fear of contagion has ramped up further with investors dumping risk assets across Europe," City Index analyst Fiona Cincotta told AFP. "Banks are leading the charge southwards with investors taking aim at Spanish and Italian banks, suggesting that these are considered the weakest links as fears rise." Asian stocks diverged on US pledges to backstop troubled lenders after the collapse of SVB was followed by the failure of Signature Bank.
Rs 99: What HSBC Bank Paid To Buy Silicon Valley Bank's UK ArmThe UK arm of collapsed US lender SVB has been sold to HSBC in a private sale overseen by Britain and the Bank of England, the government said Monday. The sale, overseen by the Bank of England and the Treasury, comes after SVB collapsed Friday sparking panic in Britain over its key customers in the technology and life science sectors.
Silicon Valley Bank Collapse: A Finance Expert Explains The ImpactThe short answer is that SVB did not have enough cash to pay depositors so the regulators closed the bank. The longer answer begins during in the pandemic, when SVB and many other banks were raking in more deposits than they could lend out to borrowers. In 2021, deposits at SVB doubled.