March 13, 2023 11:28am
SVB clients got a painful lesson: SVB have lulled depositors into a false sense of security – that’s well over or soon to be.
Thanks to the FDI, Treasury, and Federal Reserve – if not a biotech, cell and gene therapy companies would NOT be feeding their employees.
Biden reiterated a statement from the FDIC and Treasury Department during public remarks Monday morning, telling reporters that the federal government would guarantee depositors at the banks access to their funds. He added that no such protection is being offered to the banks' investors, however. His administration has also fired the leadership at both banks.
"No losses will be borne by the taxpayers," Biden emphasized. "Instead, the money will come from the fees that banks pay into the deposit insurance fund. Because of the actions that our regulators have already taken, every American should feel confident that their deposits will be there if and when they need them."
For now, policymakers have removed the risk of a run on uninsured deposits after announcing that all depositors of these two failed banks would be protected. <Bloomberg>
Going forward, what is needed is spread-our banking relationships to protect deposits MUST have to change.
The Bottom Line: always think six (6) moves ahead ...
A quick and dirty, a big issue but lesser than having cash on hand; however, a BIG hole STILL exists --- analyst coverage ----- as SVB had bought Leerink, Swan.
Hopefully JEFF Leerink, a “solid citizen” can extract himself and cohorts from SVB to reset ...
Go Woke and Go Broke…. An Opinion of the lack of Risk mitigation
Executives at Silicon Valley Bank focused on woke initiatives to increase diversity amongst its ranks and invest in startups promoting a 'healthier planet,' but failed to spot its glaring problems with investments as interest rates rose.
An outstanding ESG rating - but no chief risk operator: SVB hired woke board obsessed with diversity, invested $5BN for 'healthier planet' and held monthlong Pride celebration - but failed to spot glaring problems with investments.
· The now-failed bank had an A rating for its Environmental, Social and Governance policies according to the MSCI index after creating its own initiatives to 'advance inclusion and opportunity in the innovation economy' and investing in clean energy solutions over the past few years.
· It even announced that it would invest a whopping $5billion by 2027 to support sustainability efforts, while its European offices held a monthlong Pride celebration and promoted 'safe spaces.” <Daily Mail>
In a statement to DailyMail.com, Will Hild, the executive director for Consumers' Research, said: 'The bank suffered from a combination of senior officers <and board of director members> more focused on identity politics than risk management and investments in unprofitable virtue signaling boondoggles, like reportedly financing 62 percent of all US solar projects.
'It's also poetic that SVB would be the first bank to fail from "going woke," as the general business culture in Silicon Valley itself is notoriously far left and similarly out-of-step with the rest of the country,' he said. 'Let this be a warning, not just to other banks, but all of corporate America: Focus on serving your customers, not woke politicians.'
The consequences ... Henry McCusker, RegMed Investors