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Bank Run

All articles tagged with #bank run

finance1 year ago

"NYCB's Deposit Losses and Mnuchin's $1bn Deal: Inside the Bank's Struggle"

Customers of New York Community Bank withdrew $6 billion in deposits, causing a 7% decrease, but it's not a bank run. The bank secured a $1 billion investment and saw its shares rise after a steep plunge. NYCB is in crisis mode after reporting a surprise loss and being downgraded to junk status by credit rating agencies. The bank also announced a dividend cut and faces concerns about setting aside more reserves and estimating losses from soured loans, which could limit its profitability.

via CNN|
#bank-run#deposits#dividend
finance2 years ago

Former Silicon Valley Bank CEO apologizes for collapse and blames Fed and social media.

Former Silicon Valley Bank CEO Greg Becker will apologize for the bank's collapse and defend his decision to cash out stock and options before the bank's failure in his testimony before the Senate Banking Committee. Becker will also blame the bank's problems on "rumors and misconceptions" fomented by social media and the Federal Reserve's aggressive interest rate hikes. Becker's prepared remarks offer a counter history to recent testimony from regulators and a report produced by the Federal Reserve that largely blamed mismanagement for the lender's eventual collapse.

via Yahoo Finance|
#bank-run#ceo#finance
finance2 years ago

Former Silicon Valley Bank CEO blames Fed and social media for collapse.

Former CEO of Silicon Valley Bank, Gregory Becker, will testify before Congress that no bank could have survived the unprecedented deposit flight that led to the bank's closure by federal regulators. Becker will also defend SVB's top executives against charges of incompetence and his annual compensation of nearly $10 million. The bank suffered $142 billion in actual and requested withdrawals over two days, which is a multiple of the previous largest bank run in U.S. history. Becker links the bank's failure to government spending and Federal Reserve interest rate decisions.

via The Washington Post|
#bank-run#compensation#federal-regulators
finance2 years ago

FDIC report blames poor management for Signature Bank's failure.

The collapse of Signature Bank was due to "poor management," according to a report from the Federal Deposit Insurance Corporation. Bank management did not fully understand the risks associated with accepting crypto deposits, which comprised more than 20% of its total deposits. The bank was overreliant on uninsured deposits, which accounted for 90% of overall deposits. The FDIC report made few recommendations for regulatory changes.

via CNN|
#bank-run#crypto-deposits#fdic
finance2 years ago

Fed investigation reveals flaws in Silicon Valley Bank collapse.

The Federal Reserve and FDIC are set to release reports on their oversight of Silicon Valley Bank and Signature Bank, respectively, following their collapse last month. The reports will examine whether there were lapses in supervision and whether mid-sized banks should undergo more frequent stress tests. The FDIC will also explore changes to the deposit insurance system, as both banks had a large share of deposits exceeding the usual $250,000 insurance limit. The backstopping of uninsured deposits will cost the FDIC's insurance fund an estimated $19.6 billion. The episode has left lingering scars, with other small banks seeing a record outflow of deposits totaling $119 billion, leading to a growing risk of a recession later this year.

via NPR|
#bank-run#deposit-insurance#fdic
finance2 years ago

US Bank Failures Under Scrutiny: Problems and Fixes Highlighted.

The Federal Reserve and Federal Deposit Insurance Corporation are set to release reports on the two recent US bank failures, with the speed of the collapses a primary focus. The reports will examine whether regulators could have acted faster to prevent the failures of Silicon Valley Bank and Signature Bank. The supervisory regime at both regulators is under scrutiny from lawmakers on both sides of the aisle who have questioned why bank examiners weren't more aggressive in pursuing fixes at the failed banks.

via Yahoo News Canada|
#bank-run#deposit-insurance-system#federal-deposit-insurance-corporation
finance2 years ago

US Bank Failures Under Scrutiny: Post-Mortems Highlight Problems and Fixes.

The Federal Reserve and Federal Deposit Insurance Corporation are set to release post-mortems on the second- and third-largest US bank failures ever, with the speed of the failures remaining a primary focus. The reports will examine the failures of Silicon Valley Bank and Signature Bank, which took just 36 hours to go from functioning regional lenders to being seized by regulators. The supervisory regime at both regulators is under scrutiny from lawmakers on both sides of the aisle who have questioned why bank examiners weren't more aggressive in pursuing fixes at the failed banks.

via Yahoo Finance|
#bank-run#deposit-insurance-system#federal-deposit-insurance-corporation
finance2 years ago

First Republic Bank's Stock Plummets Amid Rescue Deal Pressure.

First Republic's stock fell by 31% on Wednesday, extending losses of nearly 50% on Tuesday, as the troubled regional bank looks for a rescue deal. The bank lost roughly 40% of its deposits in the first quarter, despite a group of 11 larger banks infusing $30 billion of deposits into First Republic in an attempt to instill confidence and prevent bank runs from spreading. Advisors to First Republic are trying to convince at least a few of those banks to provide further support by buying some of First Republic's assets at above-market rates.

via CNBC|
#bank-run#deposits#finance
finance2 years ago

The Massive Outflows that Led to Credit Suisse's Rescue

Credit Suisse lost $75.2 billion in customer deposits in Q1 2023, with outflows most acute before and after UBS announced its takeover. The bank also reported net asset outflows of $68.7 billion in the same period. Credit Suisse's first-quarter earnings could be its last after being bought by UBS in an emergency deal orchestrated by the Swiss government. The merger presents an enormous challenge to UBS, which will need to cut thousands of jobs and downsize Credit Suisse's investment bank while aligning the lender with a more conservative risk culture.

via CNN|
#asset-outflows#bank-run#credit-suisse
finance2 years ago

The aftermath of SVB's collapse and calls for stricter bank regulation.

The collapse of Silicon Valley Bank has prompted scrutiny among federal regulators and lawmakers in Congress about what went wrong and raised questions regarding what legislative or regulatory reforms may be considered to avoid a future recurrence. Federal Reserve Vice Chair for Supervision Michael Barr testified this week before House and Senate committees with jurisdiction over America’s banking system on how the management of Silicon Valley Bank (SVB) "did not effectively manage its interest rate risk and liquidity risk, and the bank then suffered a devastating and unexpected run by its uninsured depositors in a period of less than 24 hours."

via Fox Business|
#bank-run#banking-regulation#fdic
finance2 years ago

SVB's Outflows and Social Media Collapse: Regulators Disappointed and Congress Asks Questions.

Silicon Valley Bank experienced a historic bank run, with $142 billion in deposits withdrawn in just two days, leading to its collapse. The bank run was accelerated by social media and tech tools that made it easier to withdraw funds. Economist Mohamed El-Erian warns that potential high-speed bank runs pose challenges for banks and regulators. The Federal Reserve's vice chair for supervision, Michael Barr, expects more stringent lender rules to prevent future bank collapses.

via Markets Insider|
#bank-run#federal-reserve#finance
finance2 years ago

SVB's Mismanagement and Rapid Withdrawals Cause Implosion, Says Fed Official.

Silicon Valley Bank experienced a rapid and unprecedented run on deposits, with $42 billion withdrawn in just hours, leaving the bank with a negative cash balance of $958 million. Federal Reserve Chairman Jerome Powell has called for possible regulatory and supervisory changes to keep up with the speed of such events. Fed Vice Chair Michael Barr has criticized the bank's management, calling its failure a "textbook case of mismanagement." First Citizens Bank has acquired SVB's assets at a discount of $16.5 billion.

via Fox Business|
#acquisition#bank-run#finance
business2 years ago

The Unpredictable Collapse of Silicon Valley Bank: Lessons Learned.

Silicon Valley Bank's collapse came as a surprise to many, as the bank had a reputation for being well-managed and profitable. However, a lack of regulation and risk management, combined with a sudden withdrawal of deposits, led to a bank run and ultimately the bank's failure. The incident highlights the importance of proper regulation and risk management in the financial industry.

via CNN|
#bank-run#business#financial-crisis
finance2 years ago

First Republic Bank's Uncertain Future Amidst Plummeting Shares and Rescue Plans.

First Republic Bank's shares have fallen more than 47%, hitting an all-time low, and trading was halted numerous times throughout the day. The bank's customers have withdrawn around $70 billion in deposits since Silicon Valley Bank's collapse, or nearly 40% of its total holdings. Despite sweeping government measures to reassure bank depositors that their money is safe, small and regional banks are still uneasy, with First Republic at the highest risk of another lethal run. Large banks have had a huge influx of customer deposits in the past week as people grew nervous about small banks' ability to safeguard their money.

via Fortune|
#bank-run#deposit-withdrawals#finance
finance2 years ago

The Lingering Risks in Global Banking: A Closer Look.

The recent takeover of Silicon Valley Bank by regulators has raised concerns about the stability of the banking industry, with other banks facing similar risks due to the Federal Reserve's interest rate hikes. A new report from researchers at Stanford, Columbia, Northwestern and University of Southern California found that 190 banks are at risk of failure even if half their uninsured depositors withdraw their funds. Depositors are advised to check their bank's financials, including its share of uninsured deposits and Texas Ratio, to gauge risk. Credit Suisse's problems are unique and not directly related to the issues faced by SVB and other US banks.

via CBS News|
#bank-run#banking-industry#credit-suisse