Regulators close Silicon Valley Bank after bank fails to raise new capital

Yahoo! Finance ^ | March 9, 2023 | David Hollerith, Myles Udland and Dan Fitzpatrick

[Brandonmark]

Silicon Valley Bank was founded in 1983 by Bill Biggerstaff and Robert Medearis over a poker game

Texas HOLD’EM ?

[roadcat]

Article says “there are “a few” banks the department is closely watching”.....

There will be other banks failing soon, don't know which ones. But I've read of banks that had tons of money, that lent out billions in 10-year loans between 1 and 2 percent interest. Then the Fed raised rates far beyond that and the banks are stuck losing money as they sell off loans at a huge loss. Would you buy a 1.2 percent loan when you can make 5 percent elsewhere? Not without a huge reduction on the principal costs. As a depositor, wouldn't you withdraw your money earning less than 1 percent in order to invest elsewhere at 5 percent? Some banks are screwed.

[Alberta's Child]

A local bank is basically a very expensive billboard.

A bank executive once told me that his bank could function without any branches at all. But the market research they’ve done over the years consistently shows that customers would much rather do business with a bank that has a local branch even if they never set foot in that branch.

[Alberta's Child]

That’s simply not true.

These banks are losing their asses because their reserves are filled with U.S. Treasury bills paying 1.5% interest that they purchased two years ago. Meanwhile, their customers are withdrawing all their money because they can get 5% on a U.S. Treasury bill today.

[wardamneagle]

https://markets.businessinsider.com/news/stocks/sunrun-down-over-10-on-silicon-valley-bank-exposure-what-other-companies-are-exposed-1032160734

[caww]

Reminders of 2008....

[caww]

Silicon Valley Bank shutters amid nationwide modern-day bank run...A Wellesley police officer tells customers that the FDIC has just closed the Silicon Valley Bank in Wellesley Friday. It was just before noon. (Staff Photo By Matt Stone/MediaNews Group/Boston Herald)

[caww]

When the Bank Rep tells you the bank is closed....some of the people waiting were business owners concerned to meet their payroll.

[x]

2022: SBF
2023: SVB

[Radix]

I had no idea that there was a SVB in Wellesley. I am not affluent enough to drive anywhere near that town.

[frank ballenger]

Photo of group confronting bank guard.

“Look, folks, the way they told it to me is they have to replace all the chains on the pens. When they get done you can come back in.”

[Night Hides Not]

Lol, it gave me a good excuse to change the direct deposit on my pension from Wells Fargo to my credit union. I’m not worried, I have faith in the FDIC. I worked there during the last bank crisis. They have access to sufficient capital, and they quickly sell assets from failed banks to replenish the Deposit Insurance Fund.