• All depositors of the shuttered Silicon Valley Bank and Signature Bank will have access to their funds today after the Federal Reserve said it will set up a new lending facility to provide liquidity to the seized banks, though the Biden administration said the move by regulators to shore up the banks was not a “bailout” since no taxpayer funds would be put at risk in the plan. Treasury Secretary Janet Yellen, Fed Chair Jerome Powell and Federal Deposit Insurance Corp. Chair Martin Gruenberg outlined plans to control the spillover effects to the banking industry and auction SVB, though potential buyers including PNC Financial Group Inc., Royal Bank of Canada and the five largest U.S. banks had so far walked away, according to people with direct knowledge of the negotiations. (Financial Times)
• New York banking regulators, working with the FDIC, shut down Signature Bank and removed its executive team after worried depositors began calling the bank and, according to a person with knowledge of the matter, a wave of customers began to withdraw money, threatening another bank run on the heels of the failure of SVB. The bank specialized in providing services to law firms and real estate companies but had also begun accepting cryptocurrency deposits, and regulatory filings show that most of its $88 billion in deposits were uninsured by the FDIC as of the end of last year. (The New York Times)
• Facing growing concern from investors and customers about spillover effects from the collapse of SVB, First Republic Bank’s leadership released a statement noting that it has more than $70 billion of unused liquidity available through Federal Home Loan Bank and Federal Reserve funds as well as a new credit facility from JP Morgan Chase & Co. (The Wall Street Journal) Despite the public assurances, First Republic shares fell 70% in pre-market trading, while other banks were also down sharply, including PacWest Bancorp (down more than 40%) and Charles Schwab Corp. (down 20%). (Bloomberg)
• The Federal Reserve Board of Governors will hold a closed-door meeting at 11:30 a.m. to address the advance and discount rates to be charged by Fed banks. (Reuters)

Timeline: The Shocking Collapse of Silicon Valley Bank

Visual Capitalist

An analysis of regulatory filings reveals that 1,074 firms—from Andreessen Horowitz to General Catalyst—were holding capital at Silicon Valley Bank in 2022

Alexandra Sternlicht and Jessica Mathews, Fortune

While many startup founders who used Silicon Valley Bank contend with how to make payroll in coming days and weeks, the impact of SVB’s demise will stretch far beyond the startups themselves.

Biden to defend US banking system after SVB, Signature collapse

Simon Lewis, Reuters

President Joe Biden will on Monday address a banking crisis that led U.S. regulators to step in with a series of emergency measures after the collapses of Silicon Valley Bank (SIVB.O) and Signature Bank threatened to trigger a broader systemic crisis.

Sens. Cardin, Ernst urge SBA to rework proposed loan underwriting rules

Dave Kovaleski, Financial Regulation News

U.S. Sens. Ben Cardin (D-MD) and Joni Ernst (R-IA) are urging the Small Business Administration (SBA) to rework proposed changes to its loan underwriting program that would allow financial technology companies to participate as lenders.

Regulators face questions over missed warning signs at Silicon Valley Bank

Colby Smith and Stefania Palma, Financial Times

Experts say red flags at tech lender could have been spotted if banking rules had not been weakened.

Congressional briefing on Silicon Valley Bank failure postponed

Nicholas Wu and Sarah Ferris, Politico

A scheduled Saturday afternoon briefing for members of California’s congressional delegation by officials from the Federal Deposit Insurance Corporation amid jitters about the downfall of the Silicon Valley Bank was postponed, according to two people familiar with the situation.

Lawmakers press regulators to resolve bank blow-up

Sam Sutton, Politico

Lawmakers and industry groups are pressing the FDIC and other federal banking regulators to spell out their plans for resolving the collapse of Silicon Valley Bank, whose demise last week unleashed a wave of uncertainty over the banking sector.

Silicon Valley Bank Collapse Becomes Campaign Topic as GOP Warns Against Bailout

John McCormick, The Wall Street Journal

Republican presidential hopefuls argue against taxpayer-funded assistance for those who suffer losses.

Student-Loan Bills Are Set to Come Due, Adding Pressure on Younger Americans

Gabriel T. Rubin and Gwynn Guilford, The Wall Street Journal

The expected restart of student-loan repayments later this year could add to pressure on younger borrowers, who are already falling behind on debt in an era of high inflation and rising interest rates.

Fed Discusses Easing Access to Discount Window to Help Banks

Hannah Levitt et al., Bloomberg

The Federal Reserve is considering easing the terms of banks’ access to its discount window, giving firms a way to turn assets that have lost value into cash without the kind of losses that toppled SVB Financial Group.

SVB collapse puts Fed’s faith in a strong, low-risk financial system to the test

Howard Schneider, Reuters

Earlier this month the U.S. Federal Reserve in a report to Congress gave what has become a standard reassurance: Banks were strong and the overall financial system in solid shape.

Declining U.S. bank reserves add wrinkle to contentious debt ceiling issue

Gertrude Chavez-Dreyfuss, Reuters

A rapid fall in bank reserves held at the Federal Reserve, coinciding with an expected shortage of U.S. Treasury bills as the debt ceiling battle looms, has raised concerns from investors about potential stress in financial markets.

FDIC Auction for Failed SVB Underway, Final Bids Due Sunday

Matthew Monks, Bloomberg

The Federal Deposit Insurance Corp. kicked off an auction process late Saturday for Silicon Valley Bank, with final bids due by Sunday afternoon, according to people familiar with the matter.

PNC decides not to bid on Silicon Valley Bank as regulators struggle to find rescue buyers, source says

Sara Eisen and Yun Li, CNBC

PNC Financial Group decided against bidding on Silicon Valley Bank as regulators struggled to find a buyer for the failed bank’s assets over the weekend, according to a source familiar with the matter.

SVB’s Auction Block Includes VC-Focused Lender, Wealth Unit

Dan Reichl, Bloomberg

As US regulators seek a buyer for the remnants of SVB Financial Group, they’ll be working to find a home for sprawling commercial-banking operations, a wealth unit, an investment bank and a fund manager.

Silicon Valley Bank CEO should return stock-sale gains, lawmaker says

Pranshu Verma and Tony Romm, The Washington Post

Greg Becker sold $3.6 million in company stock just days before the bank’s collapse. Pressure from federal lawmakers is mounting to give it back.

Shadow Lenders Enter SVB Fray as Trapped Clients Seek Lifelines

​Carmen Arroyo et al., Bloomberg

As US authorities race to stem the fallout from the failure of California’s Silicon Valley Bank, an array of shadow lenders are stepping in to offer liquidity to the companies and funds whose cash has suddenly become trapped — at costs that ranged from moderate premiums to distressed prices.

From Santa Clara to Shoreditch, SVB Fallout Spreads Around World

Thomas Seal et al., Bloomberg

The fallout from the collapse of Silicon Valley Bank is beginning to spread around the world.

Barney Frank Sees Crypto as Common Element in New Bank Failures

Max Reyes, Bloomberg

Barney Frank — the former congressman known for the Dodd-Frank Act, which overhauled US banking regulation to prevent another global financial crisis — said there was one thing lawmakers and regulators didn’t reckon with back in 2008: cryptocurrencies.

Thiel’s Founders Fund Withdrew Millions From Silicon Valley Bank

Lizette Chapman, Bloomberg

Peter Thiel’s Founders Fund had no money with Silicon Valley Bank as of Thursday morning as the bank descended into chaos, according to a person familiar with the matter.

SVB staff offered 45 days of work at 1.5 times pay

Lananh Nguyen and Pete Schroeder, Reuters

Employees of Silicon Valley Bank were offered 45 days of employment at one and a half times their salary by the Federal Deposit Insurance Corp, the U.S. regulator that took control of the collapsed lender on Friday, according to an email to staff seen by Reuters.

Banks fought to fend off tougher regulation. Then the meltdown came.

Zachary Warmbrodt, Politico

Bank lobbyists believe the Fed may now be encouraged to press ahead with tougher rules that it was just beginning to discuss before SVB’s meltdown.

US banks sitting on unrealized losses of $620 billion

Nicole Goodkind, CNN

“The current interest rate environment has had dramatic effects on the profitability and risk profile of banks’ funding and investment strategies,” said FDIC Chairman Martin Gruenberg in prepared remarks at the Institute of International Bankers last week. “Unrealized losses weaken a bank’s future ability to meet unexpected liquidity needs,” he added.

JPMorgan faces tough battle to make Jes Staley pay for Epstein ties

Joshua Franklin and Stephen Gandel, Financial Times

Bank’s attempt to claw back former executive’s salary could set a Wall Street record.

Ex-US Rep. Buyer convicted of illegal stock purchases

The Associated Press

The Indiana congressman served from 1993 to 2011. He was indicted last year over stock trade made after he became a consultant and lobbyist.

Three Million U.S. Households Making Over $150,000 Are Still Renting

Will Parker, The Wall Street Journal

High cost of homeownership and limited supply of homes for sale drive renters.

Fintech startup Brex got billions of dollars in Silicon Valley Bank deposits Thursday, source says

Hugh Son, CNBC

Fintech startup Brex received billions of dollars in deposits from Silicon Valley Bank customers on Thursday, CNBC has learned.

Circle says $3.3 bln USDC reserves to be fully available on Monday

Reuters

Cryptocurrency firm Circle said on Sunday all its depositors with the collapsed Silicon Valley Bank (SIVB.O) and Signature Bank (SBNY.O) will be made whole and the $3.3 billion USDC reserve deposit held at Silicon Valley Bank will be fully available when banks open Monday.

Coinbase says it has about $240 mln cash balance with Signature Bank

Reuters

Coinbase Global Inc has about $240 million in corporate cash balance with Signature Bank , the U.S. crypto exchange said in a tweet on Sunday, hours after the state regulators closed the New York-based lender.

Crypto Exhales as USDC Stablecoin Rebounds Toward Peg After Being Roiled by SVB Exposure

Muyao Shen and Yueqi Yang, Bloomberg

Crypto’s second-largest stablecoin rebounded toward its intended $1 dollar peg as issuer Circle Internet Financial Ltd. pledged to cover any shortfall in $3.3 billion of reverses held at collapsed Silicon Valley Bank.

Signature Bank takeover could leave crypto companies scrambling for financial services

Leo Schwartz, Fortune

After the crypto-friendly Silvergate announced it would be voluntarily liquidating amid a capitalization crisis, blockchain companies rushed to one of the last U.S. banks that would offer financial services to the volatile industry—New York-based Signature Bank.