Silicon Valley Bank’s failure due to lack of Fed oversite
CAN YOU SAY REGULATIONS?
Credit Card debt in the U.S about to pass $1 TRILLION.
Average interest rate on that debt is 24.24%.
The Fed admits some of the blame for Silicon Valley Bank’s failure in scathing report
It’s worth stating again: Major bank failures with unemployment at multi-decade lows, positive GDP, and buoyant securities markets are a harbinger of trouble ahead.
I’ll assume a First Republic failure spurs more uninsured deposit flight from banks big and small. The plight of First Republic’s uninsured depositors – including the big banks – will be intriguing. With First Republic’s depositors tending to be upper income, a bailout comes with political risk. And as the stock market dismisses First Republic’s predicament – and with $100 billion of deposits having already exited – the case for arguing systemic risk implications is weak.
OF COURSE IT DIED
IT’S FRACTIONAL RESERVE BANKING
Another one bites the dust.
What’s interesting about First Republic is it was given time and access to all the emergency lending facilities.
It borrowed:
– $63.5B through the Fed’s discount window
– $13.8B via BTFP
– $28B from the Federal Home Loan Bank
And it still died.