SV Bank taken over by regulator

[sarsi]

https://www.reuters.com/business/fin...ay-2023-04-14/

Banks are building up rainy day funds as fears of an economic slowdown mount from the U.S. Federal Reserve's aggressive interest rate hikes to tame inflation as well as the recent turmoil fueled by the failures of two mid-sized banks - could make lenders more conservative and hurt consumer spending (JPM)

"the biggest unknown" the impact of U.S. interest rates (Citi)

https://www.reuters.com/business/fin...nk-2023-04-14/

The three banking giants received an influx of money in March as customers moved their money to higher-yielding accounts and products.

Industry-wide consumer deposits are expected to decline over the next several months due to inflation and a looming recession

Make up your minds.. banks earning from higher IR on loans cuz of rate hikes. Fed's aggressive rate hikes policy causing confusion and recession cuz loans too expensive, therefore they now expect to tighten lending themselves. SVB and Sig bank gets deposits backing, these deposits now flow to them naturally cuz risk adverse will put into bigger banks. They get scrutiny abt loan provisions so they increase it, no sweat cuz we just got a few billion in from nowhere that's why we can offer even higher yield products vs smaller banks like Wells Fargo.

But rates remain the biggest unknown still.. 😒

[sarsi]

Biggest bank failures/crisis - Lehman, UBS (2008), Credit Suisse. Investment banks. Govt bailouts

Biggest commercial bank failures - SVB, Signature Bank. FDIC/gov assist.

Former SVB, Sig bank depositors - takes refuge in investment banks. Not state banks.

😂

[sarsi]

In a fresh sign of the threat to traditional banks, Apple and Goldman Sachs on Monday announced the launch of a new savings account in the US that will pay a market-leading 4.15 per cent a year. US savers have been yanking cash out of low-yielding bank accounts and ploughing it into alternative products such as money market funds or Treasury bills that pay better returns, allowing them to take advantage of the sharp interest rate rises implemented by the Federal Reserve

https://www.ft.com/content/7bebe3d8-...1-6690c0f834b3

Probably earn transaction fees too if buying through them..vicious cycle..