Update: First Citizens acquires $72 billion in assets of defunct Silicon Valley Bank following FDIC concessions

[Commissar SFLUFAN]

Moody's cuts outlook on U.S. banking system to negative, citing 'rapidly deteriorating operating environment'

WWW.CNBC.COM

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The firm, part of the big three rating services, said it was making the move in light of key bank failures.

 

Quote

 

In a harsh blow to an already-reeling sector, Moody’s Investors Service cut its view on the entire banking system to negative from stable.

 

The firm, part of the big three rating services, said Monday it was making the move in light of key bank failures that prompted regulators to step in Sunday with a dramatic rescue plan for depositors and other institutions impacted by the crisis.

 

“We have changed to negative from stable our outlook on the US banking system to reflect the rapid deterioration in the operating environment following deposit runs at Silicon Valley Bank (SVB), Silvergate Bank, and Signature Bank (SNY) and the failures of SVB and SNY,” Moody’s said in a report.

 

The move followed action late Monday, when Moody’s warned it either was downgrading or placing on review for downgrade seven individual institutions.

 

 

[Uaarkson]

Oh boy. Here we go.

[Kal-El814]

Put finance bros against the wall.

[Spork3245]

12 minutes ago, Kal-El814 said:

Put finance bros against the wall.

They’re into that type of kinky shit, though

[Commissar SFLUFAN]

US prosecutors probing collapse of Silicon Valley Bank

WWW.REUTERS.COM

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U.S. prosecutors are investigating the collapse of Silicon Valley Bank, according to a source familiar with the matter, as scrutiny mounts over the firm's sudden collapse and regulators scramble to contain the fallout.

 

Quote

 

U.S. prosecutors are investigating the collapse of Silicon Valley Bank, according to a source familiar with the matter, as scrutiny mounts over the firm's sudden collapse and regulators scramble to contain the fallout.

 

The U.S. Justice Department is probing the sudden demise of the bank, which was shuttered on Friday following a bank run, the source said, declining to be named as the inquiry is not public. The Securities and Exchange Commission has launched a parallel investigation, according to the Wall Street Journal, which first reported the probes.

 

 

[Guest]

Regional bank stocks are on sale 😮

[marioandsonic]

Should I withdraw my money and hide it under my mattress then?

[Guest]

2 minutes ago, marioandsonic said:

Should I withdraw my money and hide it under my mattress then?

Nope

[CitizenVectron]

11 minutes ago, sblfilms said:

Regional bank stocks are on sale 😮

 

I would bet that Canada's banks (of which there are basically five national players) will take this opportunity to expand further into the US, buying up more regional banks. The same thing happened after 2008. Was it someone here who said they saw ads in 2008 or 2009 for a local bank in the US saying something like "We're owned by Toronto-Dominion Bank, so you know your money is safe"?

 

Canada made a deal with the devil over our big five banks in terms of letting them run amok, but in exchange there are some pretty heft regulations in place that make them basically more stable than the nation itself. It's why there's the joke that Canada is just five banks in a trench coat. 

 

It's definitely one of those edge cases where jurisdiction for banking is different between the two countries, with it being federal in Canada and state in the US, so it creates an overall more level playing field on the continent. Canada's big five are all in the top 11, between the two countries, which is crazy:

[stepee]

human psychology is dickkkkkkkkk

[rc0101]

28 minutes ago, sblfilms said:

Regional bank stocks are on sale 😮

They rallied pretty well today

[rc0101]

20 minutes ago, CitizenVectron said:

 

I would bet that Canada's banks (of which there are basically five national players) will take this opportunity to expand further into the US, buying up more regional banks. The same thing happened after 2008. Was it someone here who said they saw ads in 2008 or 2009 for a local bank in the US saying something like "We're owned by Toronto-Dominion Bank, so you know your money is safe"?

 

Canada made a deal with the devil over our big five banks in terms of letting them run amok, but in exchange there are some pretty heft regulations in place that make them basically more stable than the nation itself. It's why there's the joke that Canada is just five banks in a trench coat. 

 

It's definitely one of those edge cases where jurisdiction for banking is different between the two countries, with it being federal in Canada and state in the US, so it creates an overall more level playing field on the continent. Canada's big five are all in the top 11, between the two countries, which is crazy:

US banks are most definitely federally regulated as well as state regulated. 

[CitizenVectron]

Just now, rc0101 said:

US banks are most definitely federally regulated as well as state regulated. 

 

I should have said entirely a federal system, in Canada, which makes operating anywhere in the country very easy compared to needing to have separate rules in different provinces/states.

[Commissar SFLUFAN]

Signature Bank's closure had 'nothing to do with crypto' - New York regulator

WWW.REUTERS.COM

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New York’s financial regulator said its decision to close Signature Bank had “nothing to do with crypto,” citing what it called “a significant crisis of confidence in the bank’s leadership” that occurred over the weekend after regulators shuttered Silicon Valley Bank .

 

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New York’s financial regulator said its decision to close Signature Bank (SBNY.O) had “nothing to do with crypto,” citing what it called “a significant crisis of confidence in the bank’s leadership” that occurred over the weekend after regulators shuttered Silicon Valley Bank (SIVB.O).

 

The comments from a New York State Department of Financial Services spokesperson were in contrast with those made by Signature Bank board member and former U.S. Rep. Barney Frank, one of the pioneers of the landmark Dodd-Frank Act, which was enacted after the 2008 financial crisis to better insulate the banking system from shocks.

 

“I think part of what happened was that regulators wanted to send a very strong anti-crypto message,” Frank told CNBC on Monday. “We became the poster boy because there was no insolvency based on the fundamentals.”

 

But NYDFS denied Frank’s claims in a statement on Tuesday, saying that its decision to close Signature Bank on Sunday and appoint the Federal Deposit Insurance Corp as receiver “was based on the current status of the bank and its ability to do business in a safe and sound manner on Monday.”

 

 

Quote

 

“The decisions made over the weekend had nothing to do with crypto. Signature was a traditional commercial bank with a wide range of activities and customers,” an NYDFS spokesperson said.

 

“DFS has been facilitating well-regulated crypto activities for several years, and is a national model for regulating the space,” they said.

 

The spokesperson added that as withdrawal requests ballooned over the weekend, Signature Bank failed to provide reliable and consistent data.

 

 

[Amazatron]

Lol typical Moody’s, cut rating after shit hits the fan and retail investors are already reamed.

[Signifyin(g)Monkey]

16 hours ago, marioandsonic said:

Should I withdraw my money and hide it under my mattress then?

This is very clearly a localized (or at least semi-localized) crisis.  The disruptions at these institutions are specific to the sectors in which these institutions are involved—largely tech.

 

I don’t see any indication that what brought these banks down reflects the kind of generalized flaws in the global debt structure and mainstream banking practices that became the basis for the ‘08 crisis. (I do think they confirm that there is a broad downturn in the tech sector going on)

 

More importantly, people simply aren’t in debt enough to make a Great Depression/2008-style debt deflation and banking crisis possible.  Those kinds of crises reflect (multi-)generational build-ups in broad-based indebtedness that create completely lopsided debt-to-income ratios across the general population.  We don’t see that yet. (Give it another twenty years or so)

 

Moreover, I think the build-up in household savings and the inflationary surge unleashed by Covid have actually slowed the growth of debt-to-income imbalances—in a way interestingly similar to the way WWII retarded the further growth of the imbalances left over after the Great Depression.

 

Long story short: unless you’re invested in tech, you’re fine.

[Commissar SFLUFAN]

Credit Suisse is one of the most corrupt financial institutions on Earth, so its impending demise isn't something to be mourned:

 

Credit Suisse shares tank after Saudi backer rules out further assistance

WWW.CNBC.COM

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Shares of Credit Suisse hit another all-time low for a second consecutive day as the bank's biggest backer says it can't provide more financial help.

 

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Shares of Credit Suisse on Wednesday hit another all-time low for a second consecutive day, dropping by more than 24% at one point during the session.

 

Trading in the bank’s plummeting shares was halted several times throughout the morning. The stock recovered slightly by around midday London time but was still down over 20% for the session.

 

Several Italian banks were also subject to automatic trading stoppages after sharp declines on Wednesday, including UniCredit, Finecobank and Monte Dei Paschi.

 

Credit Suisse’s largest investor, Saudi National Bank, said it could not provide the Swiss bank with any further financial assistance, according to a Reuters report, sparking the latest leg lower.

 

“We cannot because we would go above 10%. It’s a regulatory issue,” Saudi National Bank Chairman Ammar Al Khudairy told Reuters Wednesday. However, he added that the SNB is happy with Credit Suisse’s transformation plan and suggested the bank was unlikely to need extra money.

 

 

[TyphoidHater]

I feel good having my money with a large credit union who is currently merging with another large credit union.  

 

Regardless, I'm way under the protection cap anyhoo 

[b_m_b_m_b_m]

So I haven’t been following this closely at all but how is this fdic receivership not supposed to cost taxpayers anything? What happens to the investors money after losses are paid out and depositors are made whole? Do they have to divvy it up? Or is it now an asset owned by Treasury?

[Commissar SFLUFAN]

2 minutes ago, b_m_b_m_b_m said:

What happens to the investors money after losses are paid out and depositors are made whole? Do they have to divvy it up? Or is it now an asset owned by Treasury?

 

Any creditors of the receivership entity will be paid out of whatever proceeds are obtained from the liquidated assets:

 

Quote

 

When an IDI fails, the FDIC is ordinarily appointed receiver. In that capacity, it assumes responsibility for efficiently recovering the maximum amount possible from the disposition of assets and the pursuit of claims in the receivership. Funds that are collected from the sale of assets and the disposition of valid claims are distributed to the creditors of the receivership according to priorities set by law.

 

The FDIC seeks to terminate receiverships in an orderly and expeditious manner. Once the FDIC has completed the disposition of the receivership’s assets and has resolved all obligations, claims, and other legal impediments, the receivership is terminated, and a final distribution is made to its creditors. Receivership creditors may include secured creditors, unsecured creditors (including general trade creditors), subordinate debt holders, shareholders, uninsured depositors, and the DIF (as subrogee). The FDIC, in its corporate capacity, is often the largest creditor of the receivership.

 

 

[Commissar SFLUFAN]

Per Bloomberg, the Swiss National Bank (the central bank) will provide liquidity for Credit Suisse, if necessary.

[Commissar SFLUFAN]

Goldman Sachs cuts GDP forecast because of stress on small banks, which are key to U.S. economy

WWW.CNBC.COM

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Goldman on Wednesday lowered its 2023 economic growth forecast, citing a pullback in lending from small- and medium-sized banks.

 

Quote

 

Goldman Sachs on Wednesday lowered its 2023 economic growth forecast, citing a pullback in lending from small- and medium-sized banks amid turmoil in the broader financial system.

 

The firm lowered its growth forecast by 0.3 percentage points to 1.2% under expectations that smaller banks will attempt to preserve liquidity in case they need to meet depositor withdrawals, leading to a substantial tightening in bank lending standards.

 

Tighter lending standards could weigh on aggregate demand, implying a drag on GDP growth already affected by tightening in recent quarters, Goldman economists David Mericle and Manuel Abecasis wrote in a note to clients.

 

 

[Uaarkson]

So is this going to trigger some kind of recession? Taking bets.

[Anathema-]

I figure that there's no cost to the taxpayer here not through any force of bureaucratic will but instead from the profit realized by absorbing the tbills rather than having to pay them back. If interest rates make the difference here between solvency and ruin then it doesn't sound crazy that the government is making out here. 

[Chris-]

On 3/14/2023 at 2:56 PM, Commissar SFLUFAN said:

US prosecutors probing collapse of Silicon Valley Bank

WWW.REUTERS.COM

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U.S. prosecutors are investigating the collapse of Silicon Valley Bank, according to a source familiar with the matter, as scrutiny mounts over the firm's sudden collapse and regulators scramble to contain the fallout.

 

 

 

[Commissar SFLUFAN]

On 3/14/2023 at 3:12 PM, CitizenVectron said:

 

I would bet that Canada's banks (of which there are basically five national players) will take this opportunity to expand further into the US, buying up more regional banks. The same thing happened after 2008. Was it someone here who said they saw ads in 2008 or 2009 for a local bank in the US saying something like "We're owned by Toronto-Dominion Bank, so you know your money is safe"?

 

Canada made a deal with the devil over our big five banks in terms of letting them run amok, but in exchange there are some pretty heft regulations in place that make them basically more stable than the nation itself. It's why there's the joke that Canada is just five banks in a trench coat. 

 

It's definitely one of those edge cases where jurisdiction for banking is different between the two countries, with it being federal in Canada and state in the US, so it creates an overall more level playing field on the continent. Canada's big five are all in the top 11, between the two countries, which is crazy:

 

In Trinidad, we have/had accounts with CIBC and Royal Bank.

[Commissar SFLUFAN]

5 hours ago, Commissar SFLUFAN said:

Per Bloomberg, the Swiss National Bank (the central bank) will provide liquidity for Credit Suisse, if necessary.

 

And right on cue:

 

Credit Suisse to borrow up to about $54 billion from Swiss National Bank

WWW.CNBC.COM

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Credit Suisse announced it will be borrowing up to 50 billion Swiss francs ($53.68 billion) from the Swiss National Bank under a covered loan facility and a short-term liquidity facility.

 

Quote

 

Credit Suisse announced it will be borrowing up to 50 billion Swiss francs ($53.68 billion) from the Swiss National Bank under a covered loan facility and a short-term liquidity facility.

 

The decision comes shortly after shares of the lender fell sharply Wednesday, hitting an all-time low for a second consecutive day after its top investor Saudi National Bank said it won’t be able to provide further assistance.

 

 

[GeneticBlueprint]

15 hours ago, Commissar SFLUFAN said:

 

And right on cue:

 

Credit Suisse to borrow up to about $54 billion from Swiss National Bank

WWW.CNBC.COM

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Credit Suisse announced it will be borrowing up to 50 billion Swiss francs ($53.68 billion) from the Swiss National Bank under a covered loan facility and a short-term liquidity facility.

 

 

[Commissar SFLUFAN]

Yes, this is truly the signifier of a completely healthy financial institution:

 

Wall Street rides to the rescue as 11 banks pledge First Republic $30 billion in deposits

WWW.CNBC.COM

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The news comes after First Republic's stock has been pummeled in recent days, sparked by the collapse of Silicon Valley Bank and Signature Bank.

 

Quote

 

A group of financial institutions has agreed to deposit $30 billion in First Republic in what’s meant to be a sign of confidence in the banking system, the banks announced Thursday afternoon. Bank of America, Wells Fargo, Citigroup and JPMorgan Chase will contribute about $5 billion apiece, while Goldman Sachs and Morgan Stanley will deposit around $2.5 billion, the banks said in a news release. Truist, PNC, U.S. Bancorp, State Street and Bank of New York Mellon will deposit about $1 billion each.

 

“This action by America’s largest banks reflects their confidence in First Republic and in banks of all sizes, and it demonstrates their overall commitment to helping banks serve their customers and communities,” the group said in a statement.

 

The deposits are obligated to stay at the bank for at least 120 days, according to an announcement from First Republic. Regional bank stocks initially fell on Thursday but reversed higher after reports from CNBC’s David Faber and others about the development of the deposit plan.

 

 

OLOLOLOLOLOLOLOLOLOLOLOLO

[SuperSpreader]

Socialists 

[PaladinSolo]

They really don't want more regulations that they have to try and get repealed at a later date.

[Commissar SFLUFAN]

The Swiss government finally "convinced" UBS to do something that they really, really didn't want to do:

 

'Shotgun wedding': What the UBS rescue of Credit Suisse means for global markets

WWW.CNBC.COM

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Despite bold proclamations about a return to stability, the sale of Credit Suisse to UBS does not appear to have laid to rest contagion concerns.

 

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In equal parts “shotgun wedding” and arranged marriage, UBS agreed to buy stricken domestic rival Credit Suisse for 3 billion Swiss francs ($3.25 billion) on Sunday.

 

Despite bold proclamations from Swiss authorities and central banks about a return to stability, the deal does not appear to have laid to rest concerns about systemic risks to global markets.

 

After years of heavy losses and costly scandals, Credit Suisse’s most recent share price plunge began with the collapse of U.S.-based Silicon Valley Bank and Signature Bank and was compounded when top investor the Saudi National Bank said it could not provide any more financial assistance.

 

The announcement of a loan of up to 50 billion Swiss francs from the Swiss National Bank failed to soothe investor concerns and eventually necessitated the 167-year-old institution’s “emergency rescue” by UBS.

 

Credit Suisse Chairman Axel Lehmann told a press conference Sunday that the “latest developments that emanated from the banks in the U.S. hit us at the most unfavorable moment.”

“The accelerating loss of confidence and the escalation over the last few days have made it clear that Credit Suisse can no longer exist in its current form,” Lehmann said.

 

 

[Commissar SFLUFAN]

Here's why the U.S. had to sweeten terms to get the SVB sale done

WWW.CNBC.COM

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The winning bidder in the government's auction of Silicon Valley Bank's main assets got several concessions to make the deal happen.

 

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The winning bidder in the government’s auction of Silicon Valley Bank’s main assets received several concessions to make the deal happen.

 

First Citizens BancShares is acquiring $72 billion in SVB assets at a discount of $16.5 billion, or 23%, according to a Sunday release from the Federal Deposit Insurance Corporation. It is gaining all the loans and deposits of SVB, as well as 17 branches, the FDIC said.

 

But even after the deal closes, the FDIC remains on the hook to dispose of about $90 billion in assets which are being kept in receivership.

 

And the FDIC agreed to an eight-year loss-sharing deal on commercial loans First Citizens is taking over, as well as a special credit line for “contingent liquidity purposes,” the North Carolina-based bank said Monday.

 

All told, the SVB failure will cost the FDIC’s Deposit Insurance Fund about $20 billion, the agency said. That makes the SVB failure the costliest in history of the deposit insurance fund, which began operating in 1934. The cost will be borne by higher fees on American banks that enjoy FDIC protection.

 

 

[rc0101]

5 hours ago, Commissar SFLUFAN said:

Here's why the U.S. had to sweeten terms to get the SVB sale done

WWW.CNBC.COM

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The winning bidder in the government's auction of Silicon Valley Bank's main assets got several concessions to make the deal happen.

 

 

never mind I misread. 
 

I am curious to see what the rate will be next year. 

[Guest]

1 minute ago, rc0101 said:

That last line about higher fees is laughable. Competition for accounts is so high that raising fees is a great way to make sure deposits leave your FI. 

I may be misunderstanding it, but I think the point was that the cost of the 20 billion will be paid for via higher fees to all FDIC member banks. Basically the same thing that happens anytime an insurance pool pays out a large claim, the result is higher premiums to the members of the pool to replenish.