LinkedIn News Features Our Piece on Banking 101 And Bank Failures

LinkedIn News featured our post on Banking 101 and why Silicon Valley Bank struggled and collapsed. As a former Lagos banker (a really good one; ask my supervisors, they rated me 5/5 continuously), that piece explained the systemic risks of the high interest rate regimes in the United States.

Now, the government has a choice: socialize losses after the millionaires had privatized their gains during the boom times. Indeed, now they are in trouble, the taxpayers will be needed to bail them out.

Read the feed here – thanks LinkedIn team for the assist; very appreciated.

Less than two weeks before Silicon Valley Bank had sold part of its portfolio at a $1.8 billion loss and was trying to raise more capital, CEO Greg Becker sold $3.6 million worth of company stock, Bloomberg reports. Regulators shut down Silicon Valley Bank on Friday amid liquidity worries and a run on deposits — the biggest bank failure since the 2008 financial crisis. The stunning collapse has at least one notable investor calling on the government to consider a “highly dilutive” bailout of the bank.

Here is the latest news on the collapse:

• Circle Internet Financial, which operates USD Coin, a digital stablecoin, said it had $3.3 billion tied up in Silicon Valley Bank. As a result, the virtual currency fell below 87 cents on Saturday, according to CoinDesk.
• Silicon Valley Bank has been put under the control of the US Federal Deposit Insurance Corporation, which is serving as the tech lender’s receiver.
• According to the FDIC, insured depositors will have access to their deposits by Monday morning, at the latest.
• Some analysts and investors are arguing that Silicon Valley Bank’s downfall is an indicator that interest rate hikes have been too aggressive, The Washington Post reports.

Register for Tekedia Mini-MBA (Jun 3 - Sep 2, 2024), and join Prof Ndubuisi Ekekwe and our global faculty; click here.