Biden says Silicon Valley Bank executives will be fired
Two top executives at Silicon Valley Bank have been slapped in a class-action lawsuit over the company’s stunning collapse.
The lawsuit names CEO Greg Becker and CFO Daniel Beck, who are accused of knowingly misleading SVB’s shareholders’ ability to manage risk.
It comes hours after President Joe Biden addressed the nation over the SVB collapse, while the US government takes steps to try to prevent an escalating financial crisis.
Mr Biden said that “taxpayers will not suffer any losses. Instead, the money will come from the fees banks pay into the deposit insurance fund.”
“The management of these banks will be fired. If the bank is acquired by the FDIC, the people who run the bank shouldn’t be working there,” Biden said.
The President said that “investors in the banks will not be protected.”
“They took a conscious risk. And when the risk doesn’t pay off, investors lose their money. That’s how capitalism works,” he added.
“I will ask Congress and banking regulators to tighten rules for banks to reduce the likelihood of this type of bank failure happening again.”
Biden says banking system is “safe” and breaks accountability of Silicon Valley bank executives
President Joe Biden reassured Americans that the country’s banking system was safe after the Silicon Valley bank collapsed last week and said financial executives would be held accountable.
The president’s actions come after the Treasury Department, the Federal Reserve and the Federal Deposit Insurance Corporation announced Sunday night that Silicon Valley bank depositors would have access to their money Monday.
“No losses – and this is an important point – no losses will be borne by taxpayers,” the president said. “Instead, the money comes from the fees that banks pay into the deposit insurance fund.”
Eric Garcia Reports from Washington, DC.
Oliver O’ConnellMarch 14, 2023 3:45 am
Voices: The collapse of Silicon Valley Bank made three things startlingly clear
Silicon Valley Bank is not a Lehman Brothers moment.
We were reassured over the weekend by regulators, bank executives and numerous media pundits who struggled to portray the SVB collapse as an outlier. But as the shockwaves spread across the globe on Sunday, from Wall Street and here in London to Asia, it became chillingly clear that a whole new and important asset class now needs to be protected – climate technology.
Oliver O’ConnellMarch 14, 2023 1:45 am
What you need to know about the Silicon Valley bank collapse
Two major banks serving the tech industry have collapsed after a bank run, government agencies are taking emergency measures to shore up the financial system, and President Joe Biden is reassuring Americans that the money they have in banks is safe.
All of this is eerily reminiscent of the financial crisis that began 15 years ago when the real estate bubble burst. But the initial pace seems to be even faster this time.
In the past three days, the US has seized the two financial institutions following a bank run on Silicon Valley Bank, based in Santa Clara, California. It was the largest bank failure since Washington Mutual’s bankruptcy in 2008.
how did we get here And will the steps the government unveiled over the weekend be enough?
Here are some questions and answers about what happened and why it matters:
Silicon Valley Bank Collapse: What You Need to Know
Two major banks serving the tech industry have collapsed after a bank run, government agencies are taking emergency action to bail out the financial system, and President Joe Biden is reassuring Americans that the money they have in banks is safe
Oliver O’ConnellMarch 14, 2023 00:45
Over £50bn has been wiped out by the FTSE 100 as bank stocks sell off
More than £50 billion was wiped out of Britain’s largest stock market on Monday after the second- and third-biggest banking failures in US history spooked investors around the world.
The collapse of the tech-focused Silicon Valley Bank sparked fears on Wall Street that the banking system would be crippled by an unrelenting cycle of rate hikes.
Oliver O’ConnellMarch 13, 2023 11:45 p.m
Bonus: Bailout of Silicon Valley saves UK tech industry – but other bank stocks plummet
Britain’s tech industry was saved from crisis on Monday after HSBC bailed out the UK arm of Silicon Valley Bank in a deal brokered by the government and the Bank of England.
Oliver O’ConnellMarch 13, 2023 11:00 p.m
Start-ups, small businesses and online retailers are desperate with frozen funds
It’s not just big tech companies and venture capital funds that are implicated in the Silicon Valley bank collapse. There are numerous small businesses, kitchen table startups and sideline online retailers that have been hit by the sudden bankruptcy.
They range from business owners who can’t pay their employees to Etsy sellers who are worried about paying bills as online payments have stalled.
Oliver O’ConnellMarch 13, 2023 10:15 p.m
Voices: The ghosts of the 2008 financial crisis hover over Biden’s response to the Silicon Valley bank
When President Joe Biden announced Monday that people who had deposited their money with the now-defunct Silicon Valley Bank would have their money at their disposal, he stressed that American taxpayers would not be let down.
Similarly, he added that those in charge of the bank must be fired and that Silicon Valley Bank’s investors would not recover, arguing that they took a risk and now must suffer the losses.
On the surface, the collapse of Silicon Valley Bank and the closure of Signature Bank in New York appear very similar to the 2008 financial crisis that sent banks like AIG to the brink and led to the collapse of Lehman Brothers. At the time, Mr. Biden was an incumbent Senator running alongside Barack Obama for Vice President. Both, like their then opponent in the White House, voted in favor of the Troubled Assets Relief Program, or TARP, which became known in the popular imagination as the “bailout.”
But there are important differences between 2008 and today.
Oliver O’ConnellMarch 13, 2023 21:45
Shopify CEO: “Very little impact for us”
Tobi Lutke, CEO of e-commerce platform Shopify, shared an email sent to merchants offering help if their funds were frozen at Silicon Valley Bank, confirming that the bank’s collapse had “very little impact on us”.
Oliver O’ConnellMarch 13, 2023 9:30 p.m
Watch: Ro Khanna says money from stock sales should be ‘reclaimed’ for depositors
Oliver O’ConnellMarch 13, 2023 21:16
The Fed’s top regulator is set to lead the review of SVB oversight
The Federal Reserve Board announced Monday that Vice Chairman for Oversight Michael S. Barr is leading a review of Silicon Valley Bank’s oversight and regulation in light of its failure. The assessment will be published by May 1st.
“The events surrounding the Silicon Valley bank require a thorough, transparent and expeditious review by the Federal Reserve,” said Chairman Jerome H. Powell.
“We must be humble and conduct a careful and thorough review of how we have overseen and regulated this firm and what we should learn from that experience,” Vice Chairman Barr said.
Oliver O’ConnellMarch 13, 2023 21:05