Silicon Valley Bank seized by FDIC as depositors pull cash
New York, Mar 10: The Federal Deposit Insurance Corporation seized the assets of Silicon Valley Bank on Friday, marking the largest bank failure since Washington Mutual during the height of the 2008 financial crisis.
The bank failed after depositors mostly technology workers and venture capital-backed companies began withdrawing their money creating a run on the bank.
Silicon Valley was heavily exposed to tech industry and there is little chance of contagion in the banking sector as there was in the months leading up to the Great Recession more than a decade ago. Major banks have sufficient capital to avoid a similar situation.
The FDIC ordered the closure of Silicon Valley Bank and immediately took position of all deposits at the bank Friday. The bank had USD 209 billion in assets and USD 175.4 billion in deposits as the time of failure, the FDIC said in a statement. It was unclear how much of deposits was above the USD 250,000 insurance limit at the moment.
Notably, the FDIC did not announce a buyer of Silicon Valley's assets, which is typically when there's an orderly wind down of a bank. The FDIC also seized the bank's assets in the middle of the business day, a sign of how dire the situation had become.
The financial health of Silicon Valley Bank was increasingly in question this week after the bank announced plans to raise up to USD1.75 billion in order to strengthen its capital position amid concerns about higher interest rates and the economy.
Shares of SVB Financial Group, the parent company of Silicon Valley Bank, had plummeted nearly 70 per cent before trading was halted before the opening bell on the Nasdaq.
CNBC reported that attempts to raise capital failed and the bank was now looking to sell itself.
Silicon Valley bank was not a small bank, it's the 16th largest bank in the country, holding USD 210 billion in assets. It acts as a major financial conduit for venture capital-backed companies, which have been hit hard in the past 18 months as the Federal Reserve has raised interest rates and made riskier tech assets less attractive to investors.
Venture capital-backed companies were being reportedly advised to pull at least two months' worth of "burn" cash out of Silicon Valley Bank to cover their expenses. Typically VC-backed companies are not profitable and how quickly they use the cash they need to run their businesses their so-called "burn rate" is a typically important metric for investors.
Diversified banks like Bank of America and JPMorgan pulled out of an early slump due to data released Friday by the Labor Department, but regional banks, particularly those with heavy exposure to the tech industry, were in decline.
Yet it has been a bruising week. Shares of major banks are down this week between 7 per cent and 12 per cent.
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Cong cites Kangana's purported remarks to accuse BJP of wanting to bring back repealed farm laws
New Delhi, Sep 24: The Congress on Tuesday cited BJP MP Kangana Ranaut's purported remarks on farm laws to allege that the ruling party was making efforts to bring back the three laws that were repealed in 2021, and asserted that Haryana will give a befitting reply to it.
The Congress shared on X an undated video of Ranaut in which she is purportedly saying in Hindi, "Farm laws that have been repealed should be brought back. I think this may get controversial. The laws in farmers' interest be brought back. Farmers should themselves demand this (to bring farm laws back) so that there is no hindrance to their prosperity.
"Farmers are a pillar of strength in India's progress. Only in some states, they had objected to farm laws. I appeal with folded hands that farm laws should be brought back in the interest of farmers."
In a post in Hindi along with the video, the Congress said, "The three black laws imposed on farmers should be brought back: BJP MP Kangana Ranaut has said this. More than 750 farmers of the country were martyred, only then did the Modi government wake up and these black laws were withdrawn."
Now BJP MPs are planning to bring back these laws, the Congress alleged.
"The Congress is with the farmers. These black laws will never return, no matter how hard Narendra Modi and his MPs try," the opposition party said on X.
Congress spokesperson Supriya Shrinate also shared the video of Ranaut on X and said, "'All three farm laws should be brought back': BJP MP Kangana Ranaut. More than 750 farmers were martyred while protesting against the three black farmer laws. Efforts are being made to bring them back."
"We will never let that happen. Haryana will answer first," she said in an apparent reference to the assembly polls in Haryana.
Congress' media and publicity department head Pawan Khera also shared the video on X and said it was the BJP's "real thinking".
"How many times will you deceive the farmers, you two-faced people?" Khera said in a post in Hindi.
The three laws -- Farmer's Produce Trade and Commerce (Promotion and Facilitation) Act; The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Act; and The Essential Commodities (Amendment) Act -- were repealed in November 2021.
The farmers' protest started at the fag-end of November 2020 and ended after Parliament repealed the three laws. The legislations came into force in June 2020 and were repealed in November 2021.
“तीनों किसान क़ानून वापस लाये जाने चाहिए” : BJP MP कंगना रनौत
— Supriya Shrinate (@SupriyaShrinate) September 24, 2024
जिन तीन काले किसान विरोधी क़ानूनों की मुख़ालिफ़त करते 750 से ज़्यादा किसान शहीद हो गए
उनको दोबारा से लाने की कोशिश की जा रही है. हम ऐसा कभी नहीं होने देंगे
सबसे पहला जवाब हरियाणा देगा pic.twitter.com/kRAkRuE2cc
