A week after the twinning collapse of Silicon Valley Bank (SVB) and Signature Bank, and the trouble at Credit Suisse, the dust is slowly settling down. SVB Financial Group has filed a voluntary petition for a court-supervised reorganization under Chapter 11 in the United States Bankruptcy Court. The company is no longer affiliated with Silicon Valley Bank, which operates under the jurisdiction of the Federal Deposit Insurance Corporation (FDIC) and is not included in the Chapter 11 filing. Meanwhile, the United Kingdom arm of the bank was acquired by HSBC for 1 British pound.
Congress announced a hearing into the failures of SVB and Signature Bank, which will take place on March 29. FDIC chair Martin Gruenberg and Federal Reserve vice chair for supervision Michael Barr are expected to appear before lawmakers to help them understand the nature of the current crisis.
The Mid-Size Bank Coalition of America (MBCA) asked United States federal regulators to extend insurance on all deposits for the next two years. According to the coalition, extending insurance on “all deposits” would “immediately halt the exodus” of deposits from smaller banks and stabilize the industry. This sounds pretty logical, given that more than 186 U.S. banks are well-positioned for collapse from the economists’ point of view.
