Let’s start with the end of the Silicon Valley Bank story, as the bank was sold. According to the U.S. Federal Deposit Insurance Corp, first-Citizens Bank & Trust Company has acquired all the deposits and loans of Silicon Valley Bank. In the hearings this week, Michael Barr, vice chair for supervision at the Federal Reserve, said, “SVB’s failure is a textbook case of mismanagement.”
I want to highlight this quote from Axios. FDIC chair Martin Gruenberg stunned with the news that SVB’s top 10 depositors had a combined $13.3 billion parked there. That implies it had customers big enough to know better — keeping more than $1 billion in cash at a single mid-sized bank.
Markets appear to be cautious but optimistic on the news of the sale.
I’m ready to move on from SVB because of the apparent conclusion that the Bank made some bad choices and, thus, why it failed. It’s not a systematic problem.
There’s a lot of noise about regulators here, but I think it’s a red herring. The system worked – those who made the wrong decisions… lost all their equity. They walk away with nothing. But the customers were backstopped by the government. I’m putting a bow on this one.