Money & Economics

This will be a Monday to remember.

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SVB Latest Developments Live Blog: Regulators Weighing Bailout Of All Unsecured SVB Depositors To Prevent "Banking Panic" | ZeroHedge

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3:00pm ET Update: In a reversal of what Janet Yellen said just hours ago, WaPo reports that federal authorities are "seriously considering safeguarding all uninsured deposits at Silicon Valley Bank" - and by extension any other bank on the verge of failure - and are weighing an extraordinary intervention to prevent what they fear would be a panic in the U.S. financial system. Translation: bailout of all depositors, not just those guaranteed by the the FDIC (<$250K).

Officials at the Treasury Department, Federal Reserve, and Federal Deposit Insurance Corporation discussed the idea this weekend, the people said, with only hours to go before financial markets opened in Asia. White House officials have also studied the idea, per two separate people familiar with those discussions. The plan would be among the potential policy responses if the government is unable to find a buyer for the failed bank.
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While selling SVB to a healthy institution remains the preferred solution - as most bank failures are resolved that way and enable depositors to avoid losing any money - there have been several reports that no big bank has stepped up as of yet, leaving the government/Fed as the only option.

As reported earlier, the FDIC began an auction process for SVB on Saturday and hoped to identify a winning bidder Sunday afternoon, with final bids due at 2 p.m. ET.

Some more from the WaPo report:

Although the FDIC insures bank deposits up to $250,000, a provision in federal banking law may give them the authority to protect the uninsured deposits as well if they conclude that failing to do so would pose a systemic risk to the broader financial system, the people said. In that event, uninsured deposits could be backstopped by an insurance fund, paid into regularly by U.S. banks.
Before that happens, the systemic risk verdict must be endorsed by a two-thirds vote of the Fed's Board of Governors and the FDIC board along with Treasury Secretary Janet Yellen. No final decision has been made, but the deliberations reflect concern over the collateral damage from SVB's collapse and authorities' struggle to respond amid limits on their powers implemented following the 2008 financial bailouts.
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"We've been hearing from those depositors and other concerned people this weekend. So let me say that I've been working all weekend with our banking regulators to design appropriate policies to address this situation," Yellen said on the CBS program "Face the Nation."

But more importantly, the WaPo report contradicts what Yellen said just a few hours earlier, namely that "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 we are not going to do that again,”

This suggests that in just a few short hours, officials and regulators peaked behind the scenes and realized just how bad a potential bad crisis could be and have made a 1800 degree U turn.
 
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The Treasury caved.

All depositor funds guaranteed, available tomorrow. Investors and the company are not being saved.

Oh, and they closed another failed bank in NY today. Signature Bank. All depositors guaranteed as well.

Printing machines working throughout the weekend .. brrrrrrrrrrr

“We are also announcing a similar systemic risk exception for Signature Bank, New York, New York, which was closed today by its state chartering authority. All depositors of this institution will be made whole. As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer.

LOL , yeah right :lmao:
 
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Just wait.

Up until now the globalist's have been saying we are in control, everything will be fine.

Now they are going to start saying if only we had more control non of this would have ever happened
 
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I wonder if they would have bailed it out if Blackrock and Oprah weren't on the hook for Billions...?
(You didnt really think they bailed it out for normal depositors did ya ;)
 
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