After the bankruptcy of Silicon Valley Park, the president of the United States, Joe Biden, calls on the population of the American nation to trust the banks. It should be noted that the bankruptcy of the Silicon Valley Bank It is one of the largest since the economic crisis that took place in 2008.
Joe Biden and trust in banks
He President of the United States, Joe Biden, spoke in front of the media and press. The political leader of the US territory assured that citizens can be calm and “have confidence” that the national bank is safe. This is how he expressed himself after Silicon Valley Bank It would remain bankrupt, for not reaching sufficient investments to save itself from the deficit and for all its shareholders to withdraw their capital almost at the same time. Specialists are afraid that this could cause a “domino effect” and create, once again, a global economic crisis.
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It’s time to strengthen the rules
Similarly, during his statement, Joe Biden invited members of the United States Congress and to the regulators that “strengthen the rules” on the banks and stressed that the losses recorded due to bank failures will not be a responsibility of the taxpayers, but that it will be the bank commissions that will pay these new funds.
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Regulatory authorities in the United States closed the Silicon Valley Bank last Friday, March 10, 2023. This after the depositors took out all their money that was inside this company. Unfortunately, they all removed it almost at the same time, causing its bankruptcy. This ranks as the second largest bank failure in the entire history of the United States, second only to the great bankruptcy that shut down Washington Mutual in 2008.
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A severe and nosedive fall
Silicon Valley He lost his economic solvency little by little, however, after a short time, his financial situation worsened. This bank, also identified by its initials BLSis the sixteenth largest lender in USA, and had about $200 billion in assets. It is important to mention that his financial status worsened as the years passed. However, only two days sufficed between his announcement about his investment cuts, and his bankruptcy filing.
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Silicon Valley Bank (SVB) reported on March 8 of this year that it was trying to raise around $2.5 billion, trying to cover holes in its balance sheet. However, two days later the Federal Deposit Insurance Corporation declared him bankrupt.
The authorities of the Federal Deposit Insurance Corporation They are trained to be able to regulate all aspects of bank deposits within the United States.
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After the need for capital was communicated, the shares of Silicon Valley Bank dropped by 60%. While all this was happening, Greg Becker, CEO of the company, invited customers to help with their money. Becker said:
“(I invite you to) support us as we have supported you.”
They removed almost everything
Some venture capitalists, unconvinced by the efforts of Silicon Valley Bank to recover, they asked that the companies within the funds of the BLS they will retire
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For his part, bill ackman, who works as a hedge fund manager, recommended that the government try to save the bank. However, by March 10 of this year, the bank’s price was already below 70% of its average price. Following this downgrade, the SVB’s trading activities were suspended.
Before the bankruptcy, the television network of CNBCrevealed information about the capital raising efforts of BLS and that they themselves failed. Given this fact, the private banking institution tried to sell itself to a larger company, however, the bankruptcy declaration by the authorities ended all these attempts.
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