Banks across America are sitting on $620 billion of ‘unrealized losses’ – assets which have decreased in value but have not yet been sold – – the head of the Federal Deposit Insurance Corporation warned.
News of the worrying shortfall came amid the closure of Silicon Valley Bank – the largest collapse since Washington Mutual in 2008.
As the government scrambles to prevent contagion, the Federal Reserve announced on Sunday night that all depositors would get their money back.
Wall Street Braces for the Next Silicon Valley Bank
Investors were worried that the fastest interest-rate increases in decades meant that something in the economy might break.
Last week, it did. Now, investors are asking: What else might crack?
… “I think this could be the first cockroach in the cellar,” said Fredric Russell, chief executive of Fredric E. Russell Investment Management Co. in Tulsa, Okla. “Banks get thrown into the dark pool of complacency, and then they lower their quality standards.”
Here’s what’s being done to prevent crisis from Silicon Valley Bank collapse
NEW YORK (AP) — Governments in the UK and U.S. took extraordinary steps to stop a potential banking crisis after the historic failure of Silicon Valley Bank, even as another major bank was shut down.
The UK Treasury and the Bank of England announced early Monday that they had facilitated the sale of Silicon Valley Bank UK to HSBC, Europe’s biggest bank, ensuring the security of 6.7 billion pounds ($8.1 billion) of deposits.
British officials worked throughout the weekend to find a buyer for the UK subsidiary of the California-based bank. Its collapse was the second-largest bank failure in history.
