President Joe Biden took no question after his short comments today…
He’s NOT a happy camper…..
He’s sitting on his hands waiting to see what is going to happen with the American banking system….
Two banks went under in the last few days….
Biden says no taxpayer ‘bail out’ money, but that’s not completely true….
The Fed has set up a special ‘fund’ to help the Silicon and First Republican Bank honor bank accounts they don’t the money for….
THAT IS using Federal/Taxpayer money folks….
No other bank has sigend up to assume these two banks right now….
Othere smaller regional banks maybe perceived to be having issues also….
So far there are NO real bank ‘runs’….
Underneath this event is another thing….
The financial ‘markets’ aren’t talking about the bank’s….
They are praying that the Fed holds on interest rate hikes…..
Something ELSE President Biden is waiting on to develop and pray this doesn’t turn into his few months in office as Vice President back in 2009….
Mr. Biden’s comments didn’t immediately appear to assuage investors, as shares of banks large and small closed the day in the red, with the KBW Bank Index, a proxy for the industry, down nearly 12 percent. On a day when the S&P 500 stock index ended up flat, shares of First Republic tumbled 60 percent and Western Alliance slumped 45 percent.
Despite the echoes of the 2008 financial crisis, when 465 banks failed within four years, sometimes dozens in a month, regulators and banking officials were quick to insist that the current panic is far more contained, and that the banks whose stocks tanked had enough funds to meet their obligations.
Last week, Silvergate, a cryptocurrency focused bank, said it would shut down; between Friday and Sunday, the government seized Silicon Valley Bank and Signature Bank.
On Monday, the Federal Reserve announced that it would conduct a review of Silicon Valley Bank’s oversight. The Federal Reserve Bank of San Francisco, on whose board the former chief executive of Silicon Valley Bank, Gregory Becker, sat until Friday, was responsible for supervising the failed bank.
“The events surrounding Silicon Valley Bank demand a thorough, transparent and swift review by the Federal Reserve,” Jerome H. Powell, chairman of the Federal Reserve, said in a release….
“Hopefully, all the regionals get through the day, aided by this new Fed facility,” Mr. Goldberg said, referring to the central bank’s emergency program offering banks favorable one-year loans in return for collateral, “and tomorrow, cooler heads prevail.”
Regional banks — and even some banks with a national presence — lack the name recognition of banking Goliaths like JPMorgan Chase and Bank of America. Yet, they play a vital role in supporting local businesses nationwide, like law firms, real estate developers, veterinarians’ offices, retail shops and restaurants. Many banks also provide wealth management and private banking services, and they serve as the primary bank for individual savers….
Tyler Gellasch, president of Healthy Markets Association, an advocate for greater transparency in financial markets.
“If Signature happened in a vacuum, we probably don’t see this regulatory action,” Mr. Gellasch said. “On each coast, we have bank failures that are uniquely focused on very wealthy and very connected industries.”
It didn’t help that Signature Bank also made a big play for cryptocurrency deposits — an area that many big banks were wary of entering, or prevented from doing so by stringent regulation. When the crypto bubble burst, the value of billions of dollars of customer deposits fell, leaving Signature on perilous ground.
At various banks, depositors — especially those with business accounts that hold more than $250,000 — were also concerned that they would lose much of their money because the Federal Deposit Insurance Corporation insures deposits of up to $250,000. On Sunday, the F.D.I.C. said that all customers of Silicon Valley Bank and Signature Bank with deposits above $250,000 would be made whole….
Do NOT listen to memebers of Congress complaining about the banks……
In 2018, Congress passed bipartisan legislation signed into law by President Donald Trump weakening regulations on mid-sized financial institutions like Silicon Valley Bank, whose collapse last week set off fears of another 2008-like financial crisis.
The measure was supported by 33 House Democrats and 17 Democratic senators, delivering Trump and the banking industry a key bipartisan victory.
But lawmakers had been explicitly told that the bill increased the risk of a financial crisis because it relaxed rules designed to strengthen banks in case of an unexpected shock — like the run on deposits last week that resulted in Silicon Valley Bank’s failure.
The Congressional Budget Office, in its estimate of how much the legislation might cost the government, said the bill would slightly increase the risk that a mid-sized regional institution would fail, potentially exposing the government to much higher costs.
The legislation would exclude some bank assets from stricter regulation, the CBO explained to lawmakers, so passing it “would thus increase the likelihood that a large financial firm with assets of between $100 billion and $250 billion would fail.” Silicon Valley Bank said it had $212 billion in assets at the close of 2022.
The 2018 legislation rolled back parts of the Dodd-Frank Act, which Congress passed in the wake of the 2008 financial crisis, imposing stiffer regulations on banks with more than $50 billion in assets. The rules were designed to prevent the government from having to do another massive bank bailout like the one lawmakers approved in 2008…..
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