Silvergate Bank, Silicon Valley Bank, Signature Bank, and First Republic Bank fell like dominos in March–April 2023. The United States Treasury, Federal Reserve, and Federal Deposit Insurance Corporation (FDIC) intervened in an unprecedented way to stall the domino effect. They waived the FDIC’s $250,000 cap on insured deposits at the failed banks, and the Fed instituted the Bank Term Funding Program to bail out any and all banks that run into trouble meeting depositors’ redemption demands.
The interventions saved the banking system, for a while. However, the inherent problem is rearing its ugly head once again.
When Signature Bank was liquidated and put into FDIC receivership, New York Community Bank bought $38.4 billion worth of Signature’s assets. Less than a year later, Moody’s
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