After experiencing both the 2nd and 3rd largest US bank failures in history, the President of the United States, Joe Biden will hold an emergency announcement tomorrow morning (Washington Time) to address the current US banking crisis.

As per Reuters, the news comes after the US government announced that it is taking actions to shore up deposits in the country and stem any broader financial fallout from the sudden collapse of both Silicon Valley Bank and Signature Bank.

The past 3 days saw 2 of the largest US bank failures in history – Silicon Valley Bank and Signature Bank. Signature Bank (SBNY) ranks 3rd in the list of largest US bank failures in history with $118 billion USD in assets at the time of failure in 2023, Silicon Valley Bank (SVB) ranks 2nd with $209 billion in assets in 2023, and Washington Mutual ranks 1st with $307 billion in assets in 2008.

The White House has issued a press statement stating that over the weekend, the US government has been working diligently with the country’s banking regulators to address problems at Silicon Valley Bank and Signature Bank. And a prompt solution of providing all depositors at these banks back their deposits, both insured and uninsured, will commence on Monday. It was mentioned that the solution also ensures that US taxpayer dollars are not put at risk.

And with all the concerns and complaints of the crisis ongoing, Joe Biden stated that he is “firmly committed to holding those responsible for this mess fully accountable and to continuing our efforts to strengthen oversight and regulation of larger banks so that we are not in this position again.”

On a closing note, the US President will deliver remarks on how the country will maintain a resilient banking system to protect its historic economic recovery tomorrow morning.

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(Source, Source 2, Via)

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USA financial authorities were busy behind the scenes for the weekend, as it was announced today that New York regulators have shut down Signature Bank (SBNY) in the country. 118 billion USD of the bank’s assets was seized by the country’s Federal Deposit Insurance Corporation (FDIC) this morning, making it the third largest bank failure in US history, right behind the Silicon Valley Bank and Washington Mutual bank failure.

In a joint statement by the US Treasury, Federal Reserve, and FDIC, New York-based Signature Bank was closed due to systemic risks in the current economic climate. The bank is the 3rd US bank to be shut down this week, after the Silvergate and Silicon Valley Bank (SVB) collapse. 

Investors and the general US public sentiment on the bank shut downs this week are very concerning, as Etsy sellers were receiving notices of delay of their payments, and US companies such as Roku and Silicon Valley tech startups were concerned about employee payrolls due to the unavailability of cash due to the collapse of the banks.

However, the joint statement announced that US Treasury Secretary Janet Yellen has approved exceptions to both Signature Bank (SBNY) and Silicon Valley Bank (SVB) today that allow the banks’ depositors to receive more than the 250,000 USD insured amount promised by FDIC on Monday. 

The statement announces that depositors will have access to all of their money, including the uninsured amounts above the 250k limit, starting Monday, March 13 in the country. It was also highlighted that no losses associated with the resolution of Silicon Valley Bank will be borne by US taxpayers’ money.

It should be noted that the banks’ shareholders and certain unsecured debtholders will not be protected. Senior management of both banks has also been removed. Any losses to the Deposit Insurance Fund to support uninsured depositors will be recovered by a special assessment on banks, as required by US federal law.

On a closing note, the US government has announced that “the U.S. banking system remains resilient and on a solid foundation, in large part due to reforms that were made after the financial crisis that ensured better safeguards for the banking industry.” 

Signature Bank (SBNY) ranks 3rd in the list of largest US bank failures in history with $118 billion USD in assets at the time of failure in 2023, Silicon Valley Bank (SVB) ranks 2nd with $209 billion in assets in 2023, and Washington Mutual ranks 1st with $307 billion in assets in 2008.

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(Source, Via)

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Besides Etsy sellers affected by the sudden shut down of Silicon Valley Bank(SVB), many more American companies and businesses have revealed recently that they were affected by the collapse of SVB. Amongst those banking with SVB, the most notable are Vox Media, Roblox, Roku and Circle.

Vox Media

Let’s start with the most famous one in tech circles, Vox Media. Vox Media is the parent company of The Verge – the popular online technology news outlet based in the United States, Vox – the viral American news and opinion website, and Polygon – the entertainment news website that covers news from the video game industry, as well as movies, comics, television and books.

The New York Times reported that Vox Media had a substantial amount of its operational cash in Silicon Valley Bank. The Vox Media personnel who was familiar with New York Times also told that Vox Media’s credit cards, which Silicon Valley Bank issued, had stopped working on Friday.

The personnel also claimed the company does not expect any disruption to its business yet, including payroll to its employees. Penske Media, Vox Media’s largest shareholder, said in a statement that it was ready if the company required additional capital but added that it didn’t foresee any issues for the time being.

Roblox

Roblox, the 21st century viral online game platform and game creation system, has also been affected by Silicon Valley Bank’s shutdown by regulators. According to Forbes, Roblox Corporation held 5% of its $3 billion in cash (150 million USD) at the bank. However, according to a filing, the video game company said SVB’s collapse will “have no impact” on its day-to-day operations.

Unity

Unity Technologies, the American video-game technology maker widely known for its video game engine, Unity, disclosed to authorities in the country today that the company held less than 5% of its cash and cash equivalents at Silicon Valley Bank and expects “minimal impact” from the bank’s collapse.

However, Unity Technologies has swiftly informed its video game publishers using Unity via email to swiftly update their payout institution from SVB to other banks before March 20, 2023 to avoid delays in payments.

Roku

Roku is an American corporation that offers Roku TV, its hardware digital media players, and a service of releasing streaming media content on its TV players.

Roku showed much concern in its SEC filing. The company reports that 487 million USD of its cash was within SVB, which is 26% of the company’s assets. What is more worrying is that Roku’s deposits with Silicon Valley Bank are largely uninsured. At this time, Roku does not know to what extent the company will be able to recover its cash on deposit at SVB.

Circle

American Cryptocurrency firm Circle, the owner of stablecoin USDC, had a massive 3.3 billion USD invested with Silicon Valley Bank, the company revealed in a tweet. That’s around 8 per cent of the company’s total $40 billion, which is held elsewhere.

Circle, stated in a statement, “Like other customers and depositors who relied on SVB for banking services, Circle joins calls for continuity of this important bank in the U.S. economy and will follow guidance provided by the state and Federal regulators.”

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(Source, Source 2, Via 1, Via 2)

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Etsy, the American e-commerce platform famous for DIY handmade or vintage items and craft supplies, is reportedly struggling to pay its sellers on time after the collapse of Silicon Valley Bank(SVB) yesterday.

Sellers on the Etsy platforms reported on Reddit and Twitter today that payments that were due to be credited to their bank accounts yesterday have not been credited by Etsy. In turn, Etsy has sent out an immediate email informing affected sellers, there is a delay in issuing payments to its sellers of the platforms, and the company is currently working with its other payment partners to resolve the matter as soon as possible. 

No concrete day or date was mentioned for how long the delay would last, so it is assumed that Etsy sellers’ funds they earned from selling their products on the website have been withheld by Etsy indefinitely. Thus, this is the first major effect of the SVB bank collapse that has impacted the general American consumer market.

Upon receiving the email, sellers were expressing their concern and anger on social media. Some sellers also went out to report the Etsy payment delays to news outlets such as NBC News, claiming that the Etsy delays will have a “catastrophic effect” on their business. 

NBC quotes American small business owner, Owen McKinney, who runs Kentucky Country Home laser engraving business, that he relies on Etsy’s deposits to pay for items like shipping costs and materials. Because of the Etsy delay, he had already reached out to one of his suppliers to delay an order for materials that he needed for next week.

As per official info online until 31 December 2022, Etsy had over 100 million items in its marketplace and the online marketplace for handmade and vintage goods connected 7.5 million sellers with 95.1 million buyers. In the fiscal year of 2022, Etsy garnered revenue of US$2.6 billion and registered a net loss of US$694 million, as a blitz scaled tech startup. 

 RELATED:

• Twitter CEO Elon Musk Says He’s Open To Buying Silicon Valley Bank
• Silicon Valley Bank Liquidated, Biggest Bank Failure Since 2008 Global Financial Crisis
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• OnePlus Ace 2V is available for Pre-Order on Giztop

(Source 1, Source 2, Via)

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