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American Banker (March 20)

2023/ 03/ 21 by jd in Global News

“After bank merger-and-acquisition activity slowed substantially in 2022, it could reach a standstill following the failures of Silicon Valley Bank in California and Signature Bank in New York.” Their “sudden demise… injected hefty doses of uncertainty into the financial system and raised doubts about the veracity of regulatory oversight.” Because they missed vulnerabilities, “bank supervisors are likely to further ramp up reviews of banks’ potential weaknesses,” which is likely to “extend to bank M&A.”

 

Financial Times (March 15)

2023/ 03/ 16 by jd in Global News

Silicon Valley Bank “was conveniently non-significant in life, but became systemically significant in death.” Looking ahead, “regulation of systemically significant banks must be extended throughout the system.” We’re reached a point where “even in a modest crisis deposits cannot be sacrificed, and rules on haircuts for provision of liquidity will go out of the window.” Since they stand “at the heart of the credit system,” banks must be regulated as “wards of the state.”

 

Wall Street Journal (March 13)

2023/ 03/ 13 by jd in Global News

“For the second time in 15 years (excluding the brief Covid-caused panic), regulators will have encouraged a credit mania, and then failed to foresee the financial panic when the easy money stopped.” Other banks may be exposed to the duration risk that brought down Silicon Valley Bank (SVB), “as last week’s selloff in regional bank stocks shows…. Something like 85% to 90% of SVB’s deposits are uninsured. The worry is that depositors in other banks will now flee.”

 

Reuters (March 11)

2023/ 03/ 12 by jd in Global News

“Nearly three years with no U.S. bank failures just came to an unseemly end.” The FDIC took Silicon Valley Bank into receivership “after a slide in deposits and a hasty capital raising failed to restore confidence. By acting quickly, regulators have stopped one crisis, but may have laid the groundwork for more.”

 

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