In an unprecedented move, the US government has guaranteed over $150 billion in uninsured deposits from wealthy tech executives and companies at Silicon Valley Bank.
The FDIC deposit limit of $250,000 (per bank account) was designed to protect working Americans…
However, the limit has been expanded to UNLIMITED for Silicon Valley Bank due to the government recognizing them as a:
“Systemic risk exception” that may cause “contagion” in the US banking system.
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The Federal Reserve, commonly referred to as “The Fed,” recently announced a massive bailout of one of Silicon Valley’s biggest banks, sparking controversy and debate. The Fed came to the rescue of the Silicon Valley Bank (SVB) with a $1.8 billion bailout package aimed at easing financial pressures caused by the COVID-19 pandemic.
The Silicon Valley Bank, which operates out of Santa Clara, California, specializes in providing financial services to startup companies and venture capitalists. The bank has been a major player in the tech industry’s growth and has helped numerous startups succeed, including household names like Uber, Twitter, and LinkedIn.
However, the economic impact of the pandemic posed serious challenges for the Silicon Valley Bank and its clients. The economic shutdowns and restrictions caused by the pandemic led to a significant decline in investments and revenues for the bank, resulting in mounting financial pressures.
In response, The Fed intervened with a massive bailout package that includes a $1.1 billion loan to SVB Financial Group, the bank’s parent company, and a $500 million line of credit. The package is intended to provide the Silicon Valley Bank with much-needed capital and liquidity to weather the economic downturn caused by the pandemic.
The Fed’s bailout has sparked controversy and criticism from some quarters, with opponents pointing to the apparent unfairness of using taxpayer funds to prop up a privately-owned bank. However, supporters argue that the bailout was necessary to prevent the Silicon Valley Bank from collapsing and causing a ripple effect of broader economic consequences.
Critics also point out that the bailout may benefit mainly a select group of wealthy clients that the Silicon Valley Bank caters to, while ordinary Americans struggle with economic hardships caused by the pandemic. However, supporters argue that the bank’s success is inextricably linked to the broader tech industry’s success, which is a significant contributor to the American economy.
The Silicon Valley Bank’s bailout by The Fed is yet another example of the unprecedented financial interventions and policies aimed at mitigating the economic impact of the pandemic. While the wider effects of these interventions remain to be seen, the bailout will undoubtedly provide some relief to Silicon Valley’s startup ecosystem and the tech industry as a whole. Ultimately, the success of the Silicon Valley Bank and the broader tech industry is crucial to the health of the American economy, and its bailout by The Fed reflects that reality.
TARP money. The government buys the banks out.
Remember the last bail out. Banks had parties. And hand out bonuses. And right before SVB went busy. They handed out bonuses. And no one went to jail. Just another repeat.
Newsome has holdings in SVB? And other politics.
The US CITIZENS bailed out the bank!
Corporate welfare
Why all this concern for trustfund babies, ruthless greedy execs .
Screw the rich they can fend for themselves after all they are RICH .
It's loans. We're not "giving" banks money. Every time we bail out a bank we get paid back. Do people think it's free money?
Government corruption at its finest These politicians plan to leave the US once they build up their stash and if things get really bad. Exomple Singapore would be a nice retirement when you got loot and no ta to pay.
It's been always like that, the poor feeds the rich
Bailouts is right
Dude is lame…only reporting half the story, just the negative side…playing on your emotions. For past 5 years his speech is always the same that everything is crashing now. Just like a furniture stor that is always going out of business for the past 6 years.
The Silicon Valley Bank execs grabbed the FDIC by the scruff of their neck, twisted until they couldn't breathe, and gave them an ultimatum. The FDIC caved and spent YOUR money to help them.
Biden owes them. He wouldn't have the title POTUS with them.
see Reagans bailout of Continental bank, not unprecedented
Had to do it to avoid a bank run on smaller banks. $150 Billion problem could turn into a $15 Trillion problem…
QUESTION: Lets say, I am wanting to buy using a VA Loan , should I wait more than 60 days OR SHOULD I buy now ,because it will balance out with the perks of financing using a VA loan in the case homes pricer lower and Interest rates rise.?
wrong!—it was an industry bailout and not fed funded. stop pinning this as a government bailout.
God bless America…
That bank's only problem is that it had a concentration of high income people who had so much money they didn't even think about spreading it around they didn't even think about the FDIC rule of guaranteeing up to 250 K. Pure idiocy! And the bank didn't remind depositors of how much is covered in case of a problem of not hedging against interest rates. And the stupid CEO of the bank didn't even know that he needed to hedge against interest rates rising. He hedged zero ZIP nada. The bank was totally vulnerable to interest rates. He just laughed every morning on his way to work at the bank. He thought he was bulletproof and the FDIC wasn't doing its job of making sure that the ratio of depositors was spread large enough to cover their obligations. Well I say the joke's on all of them and they should just learn how to not be so effing stupid . Wake up you wokesteer White House. I say let them lose their money if they're that stupid. How did they get that rich if they aren't smart enough to know that much. All the poor people know it!
The government and other words taxpayers don't have the right to do
We cannot just blame FTX, …
Said it before and I'll say it again, how was this bank (according to Google and wiki) one if the top 20 banks in america?