Money Sense
 

Banks are coming onto hard times because of their own doing. A year and a half ago record numbers refinanced or financed at roughly 2%.

You can’t loan 300,000 to a customer for 15 years at 2% and now pay them 4.5%-5% for long term deposits. It is an eventual lose-lose financial scenario. I foresee a lot more problems with banks for the next couple of years.

I hope the government has a good idea on preserving the banking system.

"hope the government has a good idea"

good luck on that one

“ Forbes — which has celebrated a host of public figures such as Elizabeth Holmes of Theranos, Adam Neumann of WeWork and Sam Bankman-Fried of FTX before they suffered public downfalls — named SVB to its America’s Best Banks list in mid-February.”
Whether it be IBD, WSJ articles or Forbes are they actual investment articles or advertisements.

Just the latest out of control self inflicted irrational exuberance financial cycle.

There are only 8 G-SIB banks (globally systemically significant banks) in the USA. Possibly 30 total worldwide.These 8 US banks are the giants of the industry and outlooked to potentially have a significant impact on world economies if failure occurs. This category is further subdivided into tiers and based upon deposit size and assets are required to keep more capital on hand than the industry mandated standards.

There is also a D-SIB category (domestically systemically significant banks). There are approx 20 banks in this category.

As for Forbes selling magazine articles on Monday morning SVB is not on either of these lists.

Google this subject and you might consider how safe you feel about your bank.

Why should the Government, ie. the tax paying man in the street, have to keep picking up the tab for private companies that keep making the same mistakes?
Governments keep bailing them out, crisis after crisis, yet the same fat cats keep their jobs, keep their huge bonuses, but never accept the responsibility of their actions.

This is just the 1st inning. SVB was just 1 of many that are going to fail. Did you see what they were donating their money too? No wonder the bank regulators gave the bank a glowing report.
An analyst made this statement a few weeks ago and I followed it: make sure you money is in equities or money market and not sitting in a bank.

GSIB banks
 

And in reality also TBTF. Too Big to Fail. And hopefully none will. I've only this week heard this term but seems these 8 have significantly stronger finances than the rest

That might be true if the banks kept the 2% loans on their books, which most did NOT.

Banks kept the fees, not the loans.

To support your claim, how many 2% loans are the bank books which are coming onto hard times??

Bank regulators pushed banks to buy treasuries at 2%. When depositors got spooked and withdrew their money, the banks couldn't cash in their bonds at par, they are now worth about 60% of face value. So once again, it was the government's dead hand on industry that caused the problem. The Fed could just guarantee the bonds at par, thereby assuring depositors, but they won't. I have no idea why. Makes too much sense, I suppose.

The Dodd Frank act takes government off the hook as the first line of defence for bank "bail outs". It established a "bail in" rule. This rule in essence allows the bank to seize non FDIC insured accounts in their bank to stay liquid.

"Are Bank Bail-Ins Legal In the United States?
Bank bail-ins are legal in the United States under the Dodd-Frank Wall Street Reform and Consumer Act

The federal government will no longer inject taxpayer dollars to prevent big bank failure. Instead, banks now have the authority to use debt capital as equity to avoid failure. This includes capital from unsecured creditors, common and preferred shareholders, bondholders, and depositors whose account balances exceed the FDIC-insured limit of $250,000."

This is called a debt/equity swap.

So how to keep your bank account safe ?
1 Keep you money in an FDIC insured account
2 Keep those accounts under the max insured limits
3 Use one of the 8 G-SIB banks
4 Put the money under the mattress and pray the house does not burn down

Please provide support for this fallacy.

The founder of the Home Depot Ken Langone has said on camera the blame for our banking system problems. You should read his comments about the way the FDIC has been operating.

This would not have happened if Congress hadn’t given in to lobbying pressure from banks to lower the amount of cash on hand banks are required to hold. That freed-up cash was invested so it could make more money, and it did. Until it didn’t.

73 MILLION to the BLM