Silicon Valley Bank collapsed this week, forcing the feds to step in and take over — which is now having a ripple effect across the country … and manifesting in a lot of fear nationwide.
ICYMI … the FDIC took over SVB’s operations Friday due to mass withdrawals that were happening among their many clients — this after just about everyone got spooked by word of them trying to shore up more capital amid concerning investments (mortgage-backed securities and whatnot) that they’d made of late, which are starting to backfire/come due.
THIS IS OUTSIDE ONE OF THE SILICON VALLY BANKS BRACH $SIVB pic.twitter.com/aFJEBQLVu6
— GURGAVIN (@gurgavin) March 10, 2023
As a result, folks started to yank their cash out of the bank all at once … which translates to a good old-fashioned bank run — like the ones we saw during the Great Depression.
Some photos/video are starting to circulate on the internet, and the lines forming outside of SVB branches — especially in the Bay Area, where they’re mostly headquartered — are quite startling. People are obviously flocking to try and recoup their money, but it might be too late at this point … once the FDIC gets involved, a queue is formed — and there’s only a handful of guarantees they can make under federal law. The key figure, of course, is $250k.
Line forming in front of $SIVB office, clients trying to get money out ahead of Monday FDIC. Reminds me of a bank run in Moscow in the 90s pic.twitter.com/4GRiKDg8hr
— serge morrell (@serge_88) March 10, 2023
The FDIC insures up to $250,000 for any given depositor in federally protected banks — anything more than that isn’t promised back though … and reports indicate much of SVB’s clientele — typically steeped in the tech startup world, who often have boatloads of assets deposited — might have way more than just that … which may be lost when the dust settles.
On top of this, there are now reports of Wells Fargo accounts freezing for people who are trying to withdraw and transfer funds. Bank of America is also getting swept up in this — both are trending, with a lot of Twitter users suggesting everyone get their cash out ASAP.
A “technical issue” is causing some Wells Fargo customers to see missing deposits in their accounts, the bank says.https://t.co/C8OYnW5P6S
— NBC News (@NBCNews) March 10, 2023
WF cited a “technical issue” their customers might be experiencing, but are saying not to panic. BoA’s been quiet so far, but it also doesn’t sound like anything concrete has happened just yet in their court — just speculation/forecasts of things to possibly come.
Scary times, indeed.
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