SVB collapses latest news: Silicon Valley bank with lawsuit for misleading shareholders after bankruptcy

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.

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.

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:

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.

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.

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.

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.

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”.

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.