{"id":617111,"date":"2023-03-12T09:09:20","date_gmt":"2023-03-12T14:09:20","guid":{"rendered":"https:\/\/news.sellorbuyhomefast.com\/index.php\/2023\/03\/12\/silicon-valley-bank-failure-could-trigger-run-on-u-s-regional-banks\/"},"modified":"2023-03-12T09:09:20","modified_gmt":"2023-03-12T14:09:20","slug":"silicon-valley-bank-failure-could-trigger-run-on-u-s-regional-banks","status":"publish","type":"post","link":"https:\/\/newsycanuse.com\/index.php\/2023\/03\/12\/silicon-valley-bank-failure-could-trigger-run-on-u-s-regional-banks\/","title":{"rendered":"Silicon Valley Bank failure could trigger run on U.S. regional banks"},"content":{"rendered":"
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A petition urging regulators to step in claims that nearly 40,000 of all depositors at Silicon Valley Bank are small businesses. <\/p>\n

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Federal Reserve and Federal Deposit Insurance Corporation (FDIC) decisions concerning the future of Silicon Valley Bank (SVB) may affect regional banks across the United States, putting trillions of dollars at risk of a bank run, said<\/a> former Bridgewater executive and CEO of investment firm Unlimited Bob Elliot.\u00a0<\/p>\n

In a Twitter thread on March 11, Elliot stated that nearly a third of deposits in the United States are held in small banks, and around 50% are uninsured. \u201cThe FDIC insures small deposits in all the banks in the US, but that only covers about 9tln of the nearly 17tln of outstanding deposit base. […] Under the hood the coverage rate is roughly 50% across most institutions while credit unions are higher (not above).\u201c<\/p>\n

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Fed\/FDIC decisions on SVB determine whether they risk a bank run trillions of dollars in size.<\/p>\n

1\/3 of US deposits are in small banks and ~50% are uninsured. Haircutting SVB depositors will raise sensible questions about holding deposits at any small bank, risking a broader run. pic.twitter.com\/RTCqekAQX4<\/a><\/p>\n<\/div>\n

\u2014 Bob Elliott (@BobEUnlimited) March 11, 2023<\/a><\/p><\/blockquote>\n

According to Fed data, small banks in the United States had $6.8 trillion in assets and $680 billion in equity as of February 2023. Considering this scenario, a failure on the tech bank would put in \u201crisk of a run on thousands of small banks,\u201d further making the SBV situation a \u201cmain street problem,\u201d said Elliot.<\/p>\n

Total assets, small, domestically chartered commercial banks in the United States. Source: U.S. Federal Reserve<\/em><\/figcaption><\/figure>\n

Elliot\u2019s comments were among many others seen on social media channels over the weekend as fear surrounded the future of the California bank. A petition created by Y Combinator CEO Garry Tan claims that nearly 40,000 of all depositors at Silicon Valley Bank are small businesses. \u201cIf swift action isn\u2019t taken, over 100,000 people could soon lose their jobs,\u201d says the\u00a0document<\/a>, urging regulators \u201cto step in and implement a backstop for depositors.\u201c<\/p>\n

According<\/a> to a Bloomberg report citing people familiar with the matter, the FDIC and the Fed are reportedly discussing creating a fund to backstop more deposits at troubled banks. The fund responds to the SVB collapse, and is intended to reassure depositors and reduce panic.<\/p>\n

Silicon Valley Bank is one of the top 20 largest banks in the United States, providing banking services to many crypto-friendly venture firms. Assets from blockchain venture capitalists\u00a0totaled more than $6 billion at the bank<\/a>, including $2.85 billion from Andreessen Horowitz, $1.72 billion from Paradigm and $560 million from Pantera Capital.<\/p>\n