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Bank Failure

All articles tagged with #bank failure

finance1 year ago

"Reflections on Silicon Valley Bank's Resurgence and Impact on Start-Up Banking"

A year after its collapse and subsequent acquisition by First Citizens Bank, Silicon Valley Bank is attempting to rebuild its reputation and customer base in the tech industry. Despite efforts to reassure customers and emphasize its continued focus on start-ups, the bank has faced significant challenges in regaining trust and deposits. The bank's former dominance in the tech industry has waned, with many customers and venture capitalists now spreading their deposits across multiple banks.

via The Washington Post|
#bank-failure#banking-crisis#finance
finance2 years ago

Former First Republic workers file lawsuit against FDIC for unpaid retirement benefits

Nearly 170 former employees of First Republic Bank have filed a lawsuit against the U.S. Federal Deposit Insurance Corporation (FDIC), accusing the regulator of blocking their access to approximately $150 million in retirement funds. The employees allege that the FDIC stopped payments intended for them under a deferred compensation plan and instead treated them as unsecured creditors. The lawsuit is the latest fallout for the FDIC from the bank's failure earlier this year, which cost the agency's deposit insurance fund about $32 billion. The FDIC is also facing litigation from the former parent company of Silicon Valley Bank, seeking the return of about $2 billion seized after the bank's collapse.

via Yahoo Finance|
#bank-failure#fdic#finance
finance2 years ago

Rural Kansas town hit by massive scam, causing fourth U.S. bank to collapse in 2023

Heartland Tri-State Bank of Elkhart in Kansas has become the fourth U.S. bank to fail in 2023 and the second Kansas bank to fail in three years. The bank was closed by the Kansas banking commissioner after becoming insolvent due to a "huge scam." The Federal Deposit Insurance Corporation (FDIC) has taken control of the bank's affairs and brokered a deal for Dream First Bank to take over its customers. The transfer has not caused any disruptions to customers, who are protected from loss. Heartland Tri-State Bank had $139 million in total assets and $130 million in total deposits.

via Kansas Reflector|
#bank-failure#dream-first-bank#fdic
finance2 years ago

FDIC Shuts Down Kansas Heartland Tri-State Bank

Heartland Tri-State Bank of Elkhart, Kansas, has failed, with the FDIC taking control and entering a purchase and assumption agreement with Dream First Bank. This comes after recent bank closures, prompting lawmakers to introduce new legislation to protect customer deposits and stabilize the financial system. Customers can access their money through checks, ATM, or debit cards, and will automatically become customers of Dream First Bank. Loan customers should also be largely unaffected, as the FDIC and Dream First Bank will share in the losses and potential recoveries on the loans.

via CNN|
#bank-failure#customer-deposits#dream-first-bank
finance2 years ago

SVB Financial Files Lawsuit to Retrieve $1.9 Billion Seized by FDIC

SVB Financial Group, the parent company of failed Silicon Valley Bank, is suing the Federal Deposit Insurance Corporation (FDIC) to recover $1.9 billion that regulators seized from the bank during its failure. SVB Financial argues that the FDIC has not provided any valid reasons for withholding the funds, which are crucial for the bank's parent company to reorganize. The FDIC, which initially estimated the bank's failure would cost $16 billion, has declined to comment on the lawsuit.

via Yahoo Finance|
#bank-failure#bankruptcy-protection#fdic
finance2 years ago

DOJ Investigates High-Paid First Republic Bank Employees' Stock Trades

First Republic Bank was paying dozens of employees more than $10 million apiece annually before its collapse. JPMorgan Chase & Co agreed to pay $10.6 billion to the FDIC to take control of most of First Republic's assets in a deal to resolve the largest U.S. bank failure since the 2008 financial crisis. Some potential rescuers were surprised by the compensation figures on display when the FDIC granted access to the bank's data room days before the agency's emergency intervention on May 1.

via Reuters|
#bank-failure#employee-compensation#fdic
finance2 years ago

"First Republic Bank's High-Paid Employees Under DOJ Investigation"

First Republic Bank, which was recently seized and sold to JPMorgan Chase, paid dozens of employees more than $10 million annually before its collapse, with at least one unnamed banker earning over $35 million last year. The bank's incentive system helped drive up compensation for employees to an average of $310,000 apiece last year, more than double the norm at JPMorgan. First Republic's failure left the FDIC's main insurance fund facing a multibillion-dollar hit, and regulators and the Justice Department are now investigating whether anyone working at the firm used inside information to make stock trades as the bank headed for collapse.

via Yahoo Finance|
#bank-failure#compensation#finance
business2 years ago

First Citizens Bank slashes hundreds of jobs at Silicon Valley Bank acquisition.

First Citizens Bank will be cutting about 500 jobs, or 3% of its workforce, associated with the recent takeover of the failed Silicon Valley Bank, which became the largest bank failure since the financial crisis in 2008. The move will only affect "select" corporate Silicon Valley Bank positions, and employees in customer-facing jobs will not be involved. The FDIC shut down SVB as it faced a liquidity crunch following a $2 billion loss, and the bank served mostly technology workers and venture capital-backed companies.

via Fox Business|
#bank-failure#business#fdic
finance2 years ago

Senator demands investigation and staff termination over Silicon Valley Bank failure.

Senator Tim Scott has called for firings at the Federal Reserve over the central bank's failure to regulate Silicon Valley Bank in the run-up to its collapse. The demand came during Senate testimony from Michael Barr, the Fed's vice chair for supervision, who faced scrutiny from members of both major parties over his admitted failure to lead proper oversight of Silicon Valley Bank. The collapse in March of Silicon Valley Bank, the nation's 16th largest bank, set off a financial panic that led to the failure two days later of another major lender, Signature Bank.

via ABC News|
#bank-failure#federal-reserve#finance
finance2 years ago

Ex-CEO of SVB Apologizes for Collapse but Shifts Responsibility

Former CEO of Silicon Valley Bank, Gregory Becker, testified before the Senate Banking Committee and deflected blame for the bank's collapse, instead pointing fingers at regulators, the media, the board of directors, and depositors. Senators criticized Becker's decision-making and lack of accountability, with one calling it "bone-deep, down-to-the-marrow stupidity." SVB's failure was caused by its decision to buy government bonds during low-interest rates, which dropped in value when inflation caused policymakers to raise interest rates. The bank also had an unusually high proportion of uninsured accounts, making it vulnerable to a bank run. Democrats have introduced legislation to increase bank regulation, while some Republicans argue that regulations already on the books are not being effectively enforced.

via The New York Times|
#bank-failure#bank-regulation#finance
finance2 years ago

Regulators' Faults Cited in Silicon Valley Bank's Demise.

California's Department of Financial Protection and Innovation admitted fault in its supervision of Silicon Valley Bank, saying it was too slow to recognize the bank's growing risks and did not act forcefully enough to address them. The bank's collapse triggered a 21st century bank run, leading to the failure of other banks and severe financial strain on several others. The agency plans to increase staffing to supervise banks with over $50 billion in assets and those with high concentrations of deposits in one particular sector.

via NBC Bay Area|
#bank-failure#bank-regulation#california
finance2 years ago

California regulators acknowledge shortcomings in SVB's downfall.

The California Department of Financial Protection and Innovation has admitted that it was too slow to recognize the growing risks at Silicon Valley Bank and did not act forcefully enough to get the bank to fix its problems. The bank collapsed and failed on March 10 after its depositors rushed to withdraw tens of billions of dollars from the bank in a 21st century bank run. The agency plans to increase staffing to supervise banks with over $50 billion in assets and those that might have high concentrations of deposits in one particular sector.

via Yahoo Finance|
#bank-failure#bank-regulation#california
finance2 years ago

Senator Warren Grills First Republic's Former CEO on Mismanagement and Lobbying.

Senator Elizabeth Warren has accused First Republic Bank executives of "mismanagement" and raised questions on the failed lender's risk management as well as pay and bonuses. Regulators seized troubled First Republic Bank and JPMorgan Chase agreed to buy majority of its assets earlier this week, marking the largest U.S. bank failure since the 2008 financial crisis. Roffler, the former CEO of First Republic Bank, has been asked to submit responses by May 17.

via Reuters|
#bank-failure#elizabeth-warren#executive-pay
finance2 years ago

PacWest Bank's Stock Drop Sparks Sale Speculation

PacWest Bancorp is reportedly exploring strategic options, including a sale or raising capital, after its shares dropped nearly 72% since the start of 2023. The California-based bank has not yet initiated an auction process, and selling all of its businesses as one hasn't been attractive to many entities. PacWest's other options include breaking its businesses up. The bank's total deposits for Q1 2023 marked a nearly 17% decrease from Q4 2022 and an approximately 15% decline from Q1 2022.

via Fox Business|
#bank-failure#capital-raising#finance