A global recession is on the horizon - please read OP for mod warning

Spare a thought for the shareholders also.

Take a breath.

SVB is not some major retail bank, aka it's not high street, it's venture capital.

Indeed, only around 5% or so will get their deposits covered by FDIC, that's because most are foreign and/or above the 250k limit. Of those, many are still likely to be covered, it will just take time. There's the possibility that all depositors could be covered (with enough time). The share-holders are last on the list and well, yeah, not good for them

The main thing is it doesn't seem to be anything systemic.

As for the "bailout" comments I've already seen. It's worth mentioning that the term can mean several different things, for example, with TARP, the US government used taxpayers money to lend to the banks to cover their intraday needs, the banks paid it back later, with heavy interest, and made a small profit for the taxpayer.

With SVB, like Lehman, I don't see the US govt doing anything too drastic, as mentioned it's a kick in the teeth for venture capital, but it's not high street.

The biggest issue will be that Irish companies will have had a lending facility with SVB and will now no longer have access to be able to draw down loans and will be scrambling to put new credit facilities in place with other banks and if they can’t then they have no access to credit which could result in them going under.

As for deposits SVB depositors would be covered by deposit guarantee schemes rules in the jurisdiction that the subsidiary bank or branch is set up in (e.g. England). However this will only be up to x amount and may not cover non retail depositors.

Fallout from other regions also coming in.

The Rothschild's getting involved now, sounds serious for just one non retail JV bank doesn't it ?

Doomsday merchants getting all excited. Will be reminding them of this in a month.

Anyone got a subscription? Headline not too inspiring!

https://www.businesspost.ie/news-focus/irelands-e134bn-phantom-exports-could-disappear-at-the-stroke-of-a-pen/

Oh wise one

Speculation rising that a bigger bailout might be coming.

https://www.washingtonpost.com/us-policy/2023/03/12/silicon-valley-bank-deposits/

It is evident that the bank has collapsed in its current form. In the event a new owner takes over, the government may have to offer assistance to the new owner?

Currently, the government appears to be contemplating guaranteeing that all depositors are able to get their money back, meaning the government is likely to step in and bail out the depositors.

It is possible to fall into pitfalls here when covering the losses of depositors of SVB, regardless of how big or small they are. Other banks in danger in the future will become even more dependent on the US government. The United States government is always stepping in and bailing you out, why would you not take risks?

If it happens, the US government will guarantee losses, there won't be an all-out run on banks, and the crisis will eventually subside We'll have to wait until Monday to find out if other banks are experiencing a similar crisis or if there is something else hidden in the shadows waiting to be exposed?

Fortunately, it is only a problem with SVB, going to be fixed. It is likely that the government will announce something soon to assure depositors in other banks that their savings and cash flow will not be lost.

Is that not the point though, how do we categorically know at this stage it is only SVB? Hopefully it is.

No one categorically knows but you can look at the facts of why 2 banks went under in a week. One wound itself up because it was the crypto bank and as crypto crashed so did its deposit base. The second bank SVB went under because of the risks it took on going long on the yield curve and the fact that tech money started to dry up….the common denominator with both banks is concentration risk.

I fully expect by lunch time tomorrow we will hear that SVB has been taken over by another bank at a big discount and all depositors will get their cash back. If this happens it should restore confidence to depositors.

It's a part of people who see any negative financial event as a forerunner to whatever financial apocalypse they perpetually think is just around the corner. That's pretty much this thread in a nutshell.