Banking Crisis 2023

On Monday, the top banking Republicans in both chambers laid blame for Silicon Valley Bank and Signature Bank's failures on the Federal Deposit Insurance Corp. and Federal Reserve, and they asked the agencies for a full autopsy of what went wrong.

The shutdowns of Silvergate Capital and Signature Bank are likely to send crypto-related businesses and digital asset innovation offshore.

On top of recession fears and elevated regulatory scrutiny, worry about the banking industry's weakness could delay the approval of mergers such as Toronto-Dominion Bank's pending acquisition of First Horizon.

According to industry experts, the deal failed because SVB publicly introduced risk to depositors and investors by announcing a need for capital. 

The Federal Deposit Insurance Corp. says it has extended the deadline for bids on Silicon Valley Bank, will break the bank into two parts for sale and will allow nonbanks to bid on asset portfolios.

Central banks involved in the dollar swaps will "increase the frequency of 7-day maturity operations from weekly to daily," the banks said.

Flagstar Bank, a subsidiary of New York Community Bancorp, will buy most of failed Signature Bank, but it's not taking Singature's digital-assets business as part of the deal.

Institutions can borrow against par-valued securities that they would otherwise have to sell at a loss when there's a run on deposits, and it could have effectiveness beyond its actual usage.

UBS Group is paying 3 billion francs ($3.3 billion) for its rival in an all-share deal that includes extensive government guarantees and liquidity provisions.

Following the collapse of Silicon Valley Bank and a wider banking-sector panic this month, the smaller banks told regulators that explicitly insuring all deposits would stem the flow of money to the largest banks.

FDIC Chairman Martin Gruenberg and Federal Reserve Vice Chair for Supervision Michael Barr are scheduled to appear before the House Financial Services Committee later this month to answer questions about the collapse of Silicon Valley Bank and Signature Bank. The hearing will be bipartisan, the committee's Republican chairman and its top Democrat said.

The high-stakes acquisitions of 2008 and subsequent legal liabilities have sapped enthusiasm from many prospective buyers for Silicon Valley and Signature Banks. The Federal Deposit Insurance Corp. may end up having to sell assets piece by piece.

Any major news provides fraudsters the opportunity to take advantage of a frenetic situation. This time, their plea for customers' banking credentials seemed extra credible.

Politicians on both sides of the aisle say the regional reserve bank deserves special scrutiny for Silicon Valley bank's failure. But larger-bank supervision tends to center on the Fed Board of Governors.

While the new deposits may have staved off a depositor run, some investors are concerned that it hasn't added any new equity to the bank.

Former Treasury Secretary Lawrence Summers said the Federal Reserve shouldn't be spooked into easing its campaign to contain inflation out of excessive concern about a credit crunch in the wake of the recent banking turmoil.

Charles Schwab Corp., one of the financial firms whose shares have been roiled by the current banking crisis, says it has added a net $16.5 billion in five days.

A category of Credit Suisse Group bonds is warning that a liquidity lifeline from Switzerland's central bank may not be enough to stabilize the embattled lender.

President Biden asked that Congress pass measures that would expand the Federal Deposit Insurance Corp.'s ability to claw back compensation from the executives of failed banks, among other measures.

Silicon Valley Bank's former parent company filed for bankruptcy a week after a run on deposits prompted regulators to seize its banking unit.