Silvergate Bank closed voluntarily on March 8 ($12 billion in assets), Silicon Valley Bank (SVB) entered FDIC takeover on March 10 ($200 billion in assets), and Signature Bank was closed by state regulators on March 12 ($200 billion in assets) $100 billion) in assets).
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Frank also added that Signature could have been a going concern. Apparently, regulators disagreed after customers withdrew more than $10 billion in deposits on Friday and Signature was taken over by the FDIC on Sunday.
Putting Silvergate on hold for now because let’s face it, it’s far less systemic risk to the wider banking system than SVB and Signature (it’s much smaller and not backed by the government), there are A very interesting thing linking SVB and Signature: media and general outcry blaming cryptocurrencies for these bank failures.
Obviously this is not true.
Even Barney Frank said it’s not necessarily about crypto, but about messaging about crypto. He told CNBC: “I think part of it is that the regulators want to send a very strong anti-crypto message … We have become a role model because there is no bankruptcy based on fundamentals.”
Each of these failures was the result of poor management of customer deposit risk and subsequent bank runs. Taking a step back, it is patently absurd to think that a single asset class whose companies had problems accessing banking services in the first place could destroy the banking system on its own. What’s this? real estate?
Cryptocurrencies have banking problems, but banks don’t have crypto problems.
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