the important thing to note is silicon valley bank doesn't just bank for silicon valley. it indexes on startups that serve a lot of critical infrastructure everything from clean tech, deep tech, in the case of my firm, defense tech these are firms that are doing really critical things for all of the united states spread across the evenntirety of the united states. >> i have a semi political question for you so many of the folks in silicon valley, not all, but a vocal contingent of true libertarians in sellilicon valley called for less regulation. we have vcs who say, you know what carried interest on taxes, we s shouldn't have to pay that because we're special and we help startups. we are a unique breed of people. does the vc community say i'll be humble and say thank you. maybe rethink what the approach is around what just happened maybe it wasn't a 2008 bailout, but guess what happens it is now happening and somebody came to the rescue and somebody has to pay for it. >> those are all very fair issues what i would say is i think what people have been saying consistently

you didn't test silicon valley bank. >> we did not apply stress test silicon valley bank. it was using its own stress test. >> did you have the authority to do that? >> under the existing regulations, no. we would've had to change regulations. >> under congresses amendment to dodd-frank, talking about 2155, isn't it a fact that we gave the federal reserve the authority to stress test silicon valley bank? >> under that legislation the federal reserve could have put in place a rule defining the word periodic in a different way than was done. >> but you didn't, did you? >> the federal reserve did not. >> if you had stress test. let me put it this way, if you had stress test silicon valley bank in 2022, it wouldn't have made any difference would it? >> i don't know the answer to that question. >> well you didn't test for silicon valley bank's problem. i've read your report. your stress test, stress tested these 34's for falling gdp, a spike in unemployment and defaults in commercial real estate. isn't that correct? >> yes in a typical adverse scenario for banks >> testing fall

ed: let's talk about how the silicon valley bank meltdown has impacted silicon valley. we have not really talked about out west and all the companies here that are suffering as a consequence. we will bring in bloomberg's smelly basket -- sonali basik, and tom giles leading the coverage from the tech perspective. what we are learning rapidly is it's not just private companies and founders with exposure here, there are publicly traded technology companies with exposure too. tom: this company, this bank had its tentacles across so many different industries, so many different types of businesses. these are publicly traded companies that kept a lot of their cash with svb, and clearly when you have 26% of your cash, the case with roku, that goes well above what is insured. this is a company that is falling in late trading. they disclosed in a regulatory filing their shares are down 6%. 26% of their total cash was held within silicon valley bank. rocket labs i another wents. -- another one. a lot of companies saying we have exposure or minimal exposure. that is something these

didn't test silicon valley bank -- we >> did not apply a stress test silicon valley bank. it was using its own stress test. >> did you have the authority to do? it >> under our existing regulations, no. we would have to change our regulation to have that authority. >> under calm versus amendment to dodd-frank, senator crapo talked about 21. 55, -- isn't it a fact that we gave the federal reserve the authority -- the authority to stress test a bank? under that legislation the authorities could've put a place -- in a different place then was done. >> right. but you did not, didn't you? >> the federal reserve did not do that. >> if you had stress tested -- let me put it this way. if you had stress tested silicon valley bank in 2022, it wouldn't have made any difference, would it? >> i don't know the answer to that question. you didn't test for silicon valley bank's problem. i read your report. your stressed test these 34 banks for fall in gdp, spikes in unemployment, defaults in commercial real estate. is that correct? >> yes, in a typical address for banks we are testing fal

silicon valley bank is a smaller regional bank. why did you advocate for government intervention here? >> it was clear i was against bailouts. i didn't think any of the investors should be protected and they are not. i didn't think any of the shareholders to be protected and they are not. i think we should -- back money from the executives who sold stock. i have been advocating very strongly for that but depositors just put their money in the bank. they should be protected. they are not assessing the risk of a bank closing and the dangers we hadn't protected those deposits or funds would have been some of that money would have gone all to the four new york banks and we wouldn't have regional banks. unlike 2008, the assets underlying silicon valley bank are good assets. it is not like they made a bunch of bad loans. made a terrible decision to just be long-term treasury bonds without a -- and they are suffering the consequence but that is why i don't think it will cost the deposit insurance fund money because ultimately, they will b

hsbc is stepping in buying silicon valley bank. it is showing us the right color this morning the rest are trading lower that is in contrast to the early indications that we see upbeat action deutsche bank is hard hit in germany on friday. down .60%. co commerz bank is down here. we are seeing the fears here and concerns if interest rates go up, what does that mean for the maturity profile for the european lenders we had a special tprogram announced in the united states to manage the bond portfolios. we don't have the same here from the central banks. perhaps some questions around what that could look like and reassessment after what has been a strong trade in banks, but still risk is coming back off the table. let's get too hsbc which flipped into the red it bought silicon valley bank uk for 1 pound in a deal fac facilitated by the government. officials held all-night talks to prevent the lender from falling into solvency. we have sylvia with the rescue come monday morning. walk us through the details. >> reporter: exactly in the

silicon valley bank is a smaller regional bank. why did you advocate for government intervention here? >> it was clear i was against bailouts. i didn't think any of the investors should be protected and they are not. i didn't think any of the shareholders to be protected and they are not. i think weshould -- back money from the executives who sold stock. i have been advocating very strongly for that but depositors just put their money in the bank. they should be protected. they are not assessing the risk of a bank closing and the dangers we hadn't protected those deposits or funds would have been some of that money would have gone all to the four new york banks and we wouldn't have regional banks. unlike 2008, the assets underlying silicon valley bank are good assets. it is not like they made a bunch of bad loans. made a terrible decision to just be long-term treasury bonds without a -- and they are suffering the consequence but that is why i don't think it will cost the deposit insurance fund money because ultimately, they will be

do you have money with silicon valley bank? john: silicon valley bank is one of the banks we use. as well as some of the other ones mentioned. the right thing, the prudent thing, we have learned is counterparty risk once these things start, this is a classic bank run and win a bank run starts, you don't want to be the last either wondering what happened. the way the banks work as they rely on trust. when they lose trust, bad things really will happen. ed: john, we have so much to discuss about what is happening with avalanche. but, we have to stick with this story because it is happening before our eyes. what do you do in this situation? do you follow the advice of names in the valley like founders fund and pull the money? do you stick with it? i have to point out there were a number of names bloomberg cited in its reporting that fed what we are seeing in silicon valley bank is not the same as silver gate and long-term they have a solid future. what would you do in this circumstance? john: hopefully, you have to diversify out. maybe, not pull everything, but pull some. caroline: y

valley bridge banking and they're extending the bid time for silicon valley private banking and a subsidiary of the bridge bank at 8:00 p.m. eastern and they're waiting on bids and there's great interest but we'll believe that when we see it. one thing we do know for sure, we know billions of dollars flowed out of svb with a run on the bank, a week from thursday and he's co-ceo and the silicon valley company and door dash and airbnb and >> thank you for having me, liz. we're putting 200 million of our own corporate tax or deposits that come in and the reason is we truly believe in a diversified strategy of not only keeping your money in one bank and by 200 million and feel good about the customer dossing the same if they want to and believe to. the second piece of it is i do think supporting them during this time and they can have a better outcome is something important and we want to have the support here. parts of the bank are still viable and do you make a bid or any intention of making a bid on any of those assets? >> i would say for us we don't have any intention so far. maybe that can

literally called silicon valley bank. it seemed that one point yesterday there was a bit of a herd mentality, a lot of people are moving money and people are talking about moving money. vcs are per -- are advising the import folios to move money. other people look around -- portfolios to move their money. other people are looking around to see if they should to. everyone likes to talk about being a contrarian inditex industry. i think maybe -- in the tech industry. maybe this situation shows it is not that way. kriti: reporting from the lobby of an svb bank office. svb becoming the stock of the hour, early we spoke to former u.s. treasury secretary about what the collapse of svb would pose to -- a risk to the financial system as a whole. take a listen. >> if this is handled reasonably, and i have every reason to think it will be, i do not think this will be a source of systemic risk. ♪ [office sounds] ♪upbeat music♪ ♪♪ ♪when the day that lies ahead of me♪ ♪♪ ♪seems impossible to face♪ ♪a lovely day

arm of the collapsed silicon valley bank. hsbc u.k. acquired silicon valley bank for 1 pound. gordon, that's $1.21, okay. in a deal that excludes the assets and liabilities of silicon valley bank's u.k. parent company, silicon valley bank. so what a are your thoughts on hsbc? is this china controlled? how do you see hsbc, hong kong of -- used to be hong kong shanghai glang yes. bank. >> yes, the thing about hsbc. china has extraordinary influence over that bank and so we have to look at this as beijing buying the assets of silicon valley bank. really, what we're seeing right now is china trying to take over the u.s. it's not just the agricultural land, not just the financial system. it's everything. and we've got to get china out of our society. i know a lot of people will think that's drastic but we are now at a point which is a crisis because we know what chinese leader xi jinping talked about. he talked about destroying the united states and just -- we cannot allow that to occur. we americans have not been paying attention to what the communist party has been saying about u

what happened at silicon valley bank impacted it's core client base. start -- start up and venture capitalists. what have your takeaways been? guest: i have been watching the hearing and vice chair michael rr -- barr field and most of the questions from the senators. it sounds like they did a review of what happened and what could've been prevented under direction of chair jay powell. was there a good way for them to see what was coming? do they need more stringent standards? he said that size is not a good proxy of risk. when silicon valley bank grew to over $100 billion in assets, should they have seen the rapid growth was part of the equation? we also heard them say that his group will be looking at whether they should change its rules. it would take a notice of proposed rulemaking. they are assessing with the could've done differently. ed: you at the technology policy institute, put yourself in the shoes that the founders and vcs that banked at svb. do you think what they heard from the panel satisfied what they went through and the questions they

currently examining the collapse of silicon valley bank. including whether stock sales by executives violated trading rules. want to bring in a big-name from silicon valley. for her take on all of this. ginni rometty, former ceo and chairman of ibm. she is out with a new book called good power. what you make of the focus in particular of oversight of board membership, executive management at this moment? ginni: something i have learned over a long time and working with boards, it has never been more important and the importance it can have on your board, people with all different disciplines. you had mel on earlier talking about the importance of cybersecurity. it goes to show it is a job everyone needs to take seriously. caroline: you sit on the board of jp morgan. the only big bank with still the same ceo from the big crisis era. i am interested what your perspective is from a banking perspective. and what that means for the sector in general. ginni: there will be many quarterbacking events taking place after that. from a regulatory side,

and a former top executive at silicon valley bank. and we have the ceo of indoor labs and a customer of silicon valley bank. good morning. your company works with open-source software and the software supply chain, and the paycheck that you pay your employees come out of silicon valley bank, right? >> yes, scott. thanks for having me. we have 42 employees that are distributed globally. we do make payroll directly but silicon valley bank. until last week, 100% of our deposits were at silicon valley bank. >> take me back to that day in which you thought to yourself, oh, no. what went through your head, what convinced you to take your money out of silicon valley bank? >> i was interviewing candidates around 10:30 a.m. on thursday, when my feed had an article about reuters talking about silicon valley bank. my first reaction was, well, this is quite a normal reaction, and then my phone started exploding with text messages from other founders, entrepreneurs, venture capitalists, and the mood shifted from 10:30 in the morning being oh, seem

charles: probably no surprise, right, but the aftermath of the silicon valley, signature bank, their failures, the blame game now shifting into overdrive. president biden blaming the prior administration and hinting at reckless banks. there were adjustments, of course, to the dodd-prank in the prior administration. they were actually done to allow community and regional banks to lend more money rather than hoard assets. the decision to roll those back, the more onerous parts, was actually bipartisan, and i'm knot talking about just one person. 33 dems in the house, 17 in the senate. is so i get the clarion call, but if we keep blaming the last person, we'll never fix the issues right now, and that is really the big issue of the day. let's take care of what we have to do in front of us. i think liz would agree. liz: yeah. charles, you and i have been sweating this one out, certainly. all that's been happening in the past, what would you call it, 100 hours? 24 hours ago charles and i were watching these i -- markets as they held their breath as every financial stock was dropping or out

as the silicon valley bank rescue brings out the bulls. it is march 14th, 2023 you are watching "worldwide exchange" here on cnbc >>> good morning welcome to "worldwide exchange." i'm frank holland. kicking off the hour with the futures. a wild day of trading yesterday that ended with the dow extending the longest losing streak since back in september futures right now in the green across the board the s&p and dow and nasdaq up .50%. we are also checking the bond market move lower in yields on the heels of the silicon valley bank rescue the 10-year treasury at 3.58 something to watch here. the 2-year treasury yield is 4.173. the spread narrowing in the last day. afte at last check, 58 basis points, reversal that spread was double previously we are watching oil which is impacted by the svb fallout. wti is $73 a barrel. down 2.5%. brent crude at $79 a barrel. down 2%. natural gas is up 1.5% we are watching crypto with bitcoin above $24,000. a lot of people saying it is count counter intuitive after the closure of silicon valley bank. >>> fut

valley bank's wealth management for their own personal capital silicon valley bank also had a unit that invested into venture capital funds. and when we think about what's happened now, we only saw $250,000 of those amounts protected. now in a normal banking relationship for a consumer, that would probably cover it, but in many instances, there were firms that had millions of dollars that were deposited. now those funds are at risk. >> we'll be back to you in just a moment stay with me, lo i want to get back to steve liesman. we fixed his audio thankfully. on this issue, steve, i represented you the portion of the most recent minutes. and my question to you was has the fed been worried about and thinking about breaking something enough lip service in a paragraph means squat. have they been thinking about it enough >> i think what we might learn, scott, is they have not been i mean, if you look at the monetary report to congress, which is just a little bit more recent than the document you said that you read earlier, there's not much mention at all of risk from this. at the same time whe

in their news release, silicon valley -- the fdic, rather, says silicon valley bank santa clara was closed today by the california department of innovation and protection which appointed the federal deposit insurance corporation as the receiver so, the administrator of this now wound-down bank, the process of being wound-down bank, to protect depositors the fdic has created deposit insurance at santa clara bank they have immediately transferred to this new receiver bank all of the insured deposits that were held at silicon valley bank they go on to say that all insured depositors will have full access to their insured deposits no later than this coming monday morning, march 13th the fdic will pay uninsured depositors an advance dividend within the next week and those uninsured depositors will receive a receivership certificate for the remaining amount of their uninsured funds. uninsured that are held at silicon valley bank. this is all happening as the fdic sells the assets of silicon valley bank. when they do, future dividend payments will be made to those uninsured depositors the point h

. >> they were not in the silicon valley? >> i don't know precisely the extent of the in person meetings versus the remote analytic work. >> that's another problem we have to talk about having all this work off-site whenever they need to be on site and having access to the daily data but as a result of this, following up with some of the questions asked before but in a different way you knew we had an illustrated risk problem it's been established this morning and have examiners in the bank or watching it on a daily basis and there were reports that need to take some action. why was no action requested or forced on the bank. >> there was action recorded in the matters requiring the attention. >> why were they not enforced? >> we don't yet know the answer what would the introductions with the bank that is part of the supervisory record. why do you need more rules? >> i don't think we need more rules until we figure out which ones are not being enforced. to be able to do your job after that point then we can take a look at you

i5 for silicon valley london or a silicon valley uk.— for silicon valley london or a silicon valley uk. for silicon valley london or a silicon valle uk. , ., ., ., , silicon valley uk. is that good news auestion silicon valley uk. is that good news question mark— silicon valley uk. is that good news question mark i _ silicon valley uk. is that good news question mark i think _ silicon valley uk. is that good news question mark i think that's - silicon valley uk. is that good news question mark i think that's bright l question mark i think that�*s bright in that the first course of action, or the first possible outcome seems to be an acquisition of the entire bunk. even the parent company in america which obviously scv uk was a subsidiary. there are reports that the regulator in america is try that and accept bids through an auction process today at us time. early front rotors for that conversation were banks such asj.p. morgan and others of the like. similarly, here in the uk, clearly, hm treasury and the bank of england would like to see silicon valley bank uk is potentially acqui

it's called silicon valley bank. they've taken control of customer goes deposits, the largest such failure going back to the meltdown of that year. this comes as venture capital-funded firms, i should say, was trying to raise money to plug a loss from sales due to higher interest rates. it has a lot of treasury notes and bonds on its books, more than half of its better than $200 billion are treasury notes and bonds. the irony there is those are conservative investments and as safe as you can be. but for a company like this, leveraged to the point that the it needed cash past to cash out of those, it would be underwater and, obviously, you know what cascaded since. federal regulators have said and janet yellen, the treasury secretary the, has emphasized that this is not widespread, they're monitoring the situation, and the fdic will back depositors there. we have gary kaltbaum on the significance of what's going down. and what from what we -- from what we hear, gary, we also have with us douglas are holtz-eakin and su

saying, what did silicon valley bank do for ou? ., saying, what did silicon valley bank do for ou? . ., ., do for you? thanks for having me. they were — do for you? thanks for having me. they were our _ do for you? thanks for having me. they were our bank. _ do for you? thanks for having me. they were our bank. i _ do for you? thanks for having me. they were our bank. i am - do for you? thanks for having me. they were our bank. i am the i do for you? thanks for having me. i they were our bank. i am the founder and ceo of a start—up here, they were who we banked with. whether it was charge cards around ripart deposits. was charge cards around ripart deosits. ~ ., ., , ., deposits. without them would you have been able _ deposits. without them would you have been able to _ deposits. without them would you have been able to set _ deposits. without them would you have been able to set up? - deposits. without them would you have been able to set up? maybe | deposits. without them would you i have been able to set up? maybe not as easil . have been able to set up? maybe not as easily

maybe these are silicon valley friends of theirs. it will get interesting in the days to come when we find out how much money was donated by who, and bank failures donated big dollars to democrats instead of preventing crisis, and sound policies they always blame donald trump. even blame him for the border crisis they caused. they blame trump for record setting illegal immigration, no the border was secure under trump. 1.4% when donald trump left office, they went up to 9% .1%. one 40-year high after another. blamed donald trump for ukraine. they even tried to blame him for the toxic train derailment in east palestine, in ohio. even the washington post was forced to call out this blatantly. that is not going to stop them from repeating the same lie over and over and over again. the buck stops here? if the dog bites the bee stings, if you are feeling sad it's all donald trump's fault according to joe biden, take a look. >> you take down regulations, you water down regulations, you weaken the power of the administration to deal with fr

unfortunately, silicon valley bank was one of the weak ones. gerry: richard fowler, i guesses the counterpoint is, look, if there are problems in the banking sector the, if banks are going to cut back on some of their loans because they're in some difficult9ty, that is going to slow the economy on its own, so why have the fed add to the pain by continuing these interest rate increases because these financial sector problems will cause a slowdown? what do you make of that? >> look, it because the seem like the feds are going to raise rates, but i would caution that what we know is raising rates is a lagging indicator. so when you raise rates, you have to wait a couple months to see the impact. so i would urge d and i hope we see a smaller rate increase waiting to see the impact knowing that we are seeing a down canward trend in inflation as we speak, and we're also seeing the job market remain stable which seems to be a good sign for all those who seem to be willing a recession to happen that doesn't seem likely. i think this is also an opportun

take the silicon valley situation. despite the chaos of the 10 year future has already recovered about that trendline by the end of the week. now, substantially higher. last week, the thing yielded almost 40%, now it is back to 3.5%. the 10 year future ahead of the 124 2-0. that should take the yield closer to 2%. marks the low end of the previous uptrend channel that existed for nearly 2 decades before russia invaded ukraine, causing food and inflation to explode. when you look at the relative strength index, down here, this is really interesting, gardner notes that the 10 years currently recovering from the most oversold reading in multiple decades, still pretty darn low, an long way from overbought territory meaning, along about treasury prices could have a more upside, that translates into lower interest rates. what we have seen right now could be just the beginning. god also points out the commodity market most impacted by rush's invasion of ukraine have given back all of their gains. those are what set off a huge

both silicon valley and signature. and we also had before us evidence of significant liquidity stress of other institutions and we have data in terms of deposit outflows. i think that was basically the data we relied on. >> if the chair will submit that data for the record an answer, would you be willing to do that? the data -- >> yes, of course,. >> related to systemic risk. >> yes. >> we will now go to the gentleman from iowa mr. nunn for five minutes. >> thank you, mr. chair. thank you for being here today. if you would just with a show of hands, you believe that us most americans do i as i said and as the president said the taxpayer should not be on the hook for that? would you agreeee with that statement? >> yes. >> further, would you agree with the statement that we should have diversity within our banking system? >> yes, i agree. >> specifically then would you be supporting our regional banks, are small and local banks and recognize the undue burden the potential you are going to be saddled with as a result of a

silicon valley bank. however, it does have approximately a $40 million lending facility, which is unaffected by the fdic's receivership meantime, rocket lab says it has approximately 38 million with silicon valley bank. that amounts to nearly 8% of the company's total cash, and cash equivalents, and marketable securities as of december 31st roblox saying it has 3 billion of cash and cash securities as of february 28th, 2023 about 5% of that is held at sill von valley bank. silicon valley bank. the company says thus regardless of the ultimate outcome and the timing this situation will have no impact on the day-to-day operations of the company. i am sure we're going to continue to hear these 8-ks, sara, because a lot of folks want to reassure investors they aren't affected by this. >> don't want to put their name with svb, but want to assure them bertha, thank you. bit of a theme there with the companies that banked with svb >> so when this kind of stuff goes down you look at companies that could have expos

silicon valley bank is a mainstay _ deposits. silicon valley bank is a mainstay of _ deposits. silicon valley bank is a mainstay of the - deposits. silicon valley bank is a mainstay of the fintech l is a mainstay of the fintech industry, a lot of fintechs started their businesses running accounts out of there, some of them won't be able to make payroll as a result of this presumably, unless a deal is done last minute. there is some uncertainty, but at the same time, it's not entirely unexpected, because of the structural changes happening to the banking sector. lats structural changes happening to the banking sector.— the banking sector. lots has happened — the banking sector. lots has happened in _ the banking sector. lots has happened in the _ the banking sector. lots has happened in the banking - the banking sector. lots has i happened in the banking sector since the 2008 crash, and there have been paralleled, but it's quite a different scenario. well, if you look at the liquidity problem is that they had, part of that is the ability to attract deposits cheaply and aggre

i think silicon valley is an unusual set of businesses. so there's mantras around here that you want to fail quickly and pivot rapidly. conventional wisdom doesn't live for very long. so larger banks with larger deposit bases are a little slower to react. one of the unique advantages silicon valley bank had is they had relationships with me and many other founders and investors in venture capital funds, so they could figure out through social connections what was working, what wasn't working. they use that not insider knowledge but more sophisticated social knowledge to make decisions about what startups to work with and which ones not to work with. knowing which one is going to succeed and which is going to fail is impossible. the world expert in deciding which startups succeed and fail are venture capitalists. they're very smart people whose profession is to make those decisions. silicon valley bank is able to start which startups to work with and which not to work with. so they have an advantage in being able to work with this silicon v

the silicon valley _ why the silicon valley bank? tue: silicon valley bank why the silicon valley bank? tte: silicon valley bank has why the silicon valley bank? "tt2 silicon valley bank has been why the silicon valley bank? tt2 silicon valley bank has been around for a0 years, it is very well represented in the tech industry, as you know, many tech start—ups bank with them, hundreds across the uk, thousands in the us, they represent about 50% of start—ups, so they have until 72 hours ago had a fantastic reputation of understanding the nuancesin reputation of understanding the nuances in the start—up community, which are different to established companies, and they are very well positioned to help with our sector and ensure that we were looked after correctly. and ensure that we were looked after correctl . ~ , ., _ and ensure that we were looked after correctl . ~ ., . , correctly. when you say nuances with the sector, does _ correctly. when you say nuances with the sector, does that _ correctly. when you say nuances with the

>> silicon valley bank was our founding sponsor. they gave us our first check when we were still in the idea stage. they were the person to take on the most risk when it came to finding things at the idea stage. they really took a chance to make ecosystem better as a whole and we really wanted to partner with a bank that saw our vision and what we were trying to create. we were helping everyone break into venture and build their own startups. last but not least, we actually helped them raise capital for their own funds. that is one of the key things that we will be missing is that first check in that will allow people to make this system better. we were exposed because we were there banking partner and that is something that i come as an investor and a founder was really cognizant of. i have other founders reaching out to me. as a founder and investor, i can clearly support using my own experience and the experience -- the community as a whole. quest -- ed: they have open their doors. what have you done to help founders make payroll

no bay loud for silicon valley bank. the lender sadden collapse, has lifted companies and investors stranded. what would it mean for the global economy will bring you analysis also coming out. moldova says pro russian actors are trained to cause unrest during anti government protest. interesting. now we'll hear from our correspondence via and with osgood and i just hours away. now, hollywood is getting ready. we'll take a look at the films tip to win the academy awards. ah, i'm, we'll all soccer. it's good to have you with us. us treasury secretary, a janet yellen has said the government is not looking at bating out silicon valley bank offered was shut down by you as regulators on friday. the bank is the 16th largest in the united states. authorities say they were worried about the banks. they quit as he offered lost money while selling assets. the concerns from to the banks. depositors mainly tech companies to rush to withdrawal fund sparking phase over the wida banking sector. speaking on sunday morning, british financ

this is a bank that caters towards silicon valley client. startups in silicon valley. the bank has said that these clients have been burning through cash through the tech slump. now we are seeing funds come back and say to their startup clients, look, this bank is not safe. you have got to withdraw your deposits and maybe look to put them elsewhere. having said that, i must stress that the ceo of svp's parent company is saying, please stay calm. don't panic. there are some startups clients of the bank that have vowed to support it. a panic situation, very chaotic and unclear how this will pan out. dani: they have very clearly, a fear of a broader bank repercussion. you look at bill ackman saying the failure of sbb could destroy an important long-term driver of the economy and called for a government bailout if there is no private capital options. why are we so worried about the broader banking sector? he of course goes on to say a highly diluted government bailout should be considered. so, why the worry? could we get to the stage where the government needs to intervene

silicon valley bank was part of that club. we have to look at how that -- elements of that club created some of these issues i think really opening it up and creating a more sustainable and stable way for us to fund these companies over time. >> the culture thing, as a depositor, that feels like something you could suss out there's a debate about what -- how much of your bank's risk profile you look into, as a depositor, right do you think that as an aggregate depositors were lax or not? >> no. i think really it's unfair to hold to account businesses that they should be tracking the financial health of their banks. >> right >> especially banks that are seen as really the main source of financing for the ecosystem the losses of silicon valley bank will have a bad impact on the industry they were a central player they provided a lot of capital they were one of the few banks that would open up deposit accounts for these early-stage companies and they had a specialty in serving them. the idea that a startup or young founding team

one problem is silicon valley bank. one of the reasons why silicon valley bank is not bought right now and i know apollo is in there, we reported it last week, there's other stories coming out now. i know a lot about this situation. they're having a hard time having people to help them finance it. how do you value loans on the book from portfolio companies of vcs that are not making money? i mean, that's what we're talking about. silicon valley bank went out on the risk spectrum giving loans to these businesses. there's a double whammy there and that caused it to implode. when the companies are losing money, they have money here, you take out here to make up for the money you lost. >> neil: are there's others out there -- one thing i can remember the craziness of the meltdown is cooler heads did not prevail. with the tumbling of the stock market, the currency was gone. >> yeah, i don't know if there's other banks. there's lots of rumors about banks being in trouble. i don't want to mention those banks. i don't want to b

talking about some after this fundamentals the way investments at silicon valley bank silicon valley bank versus people putting more than in uninsured depositors over there didn't match up frankly you didn't see, you don't see that, under diversification, lack of diversification in banks i have talked to middle sized banks in south eat louisiana don't have the same problems not a systemwide program but checks coming due from two years of president biden's reckless spending that drove inflation drove interest rates, a lot of people said fed was late, in the game then whether they got in the game started raising rates too much too fast as opposed to catching early they kept spending trillions paying people not to work made no sense one of the reasons they lost a majority in the house, why we need to restore fiscal sanity in washington. maria: good point when you are in a situation people think we are already vulnerable, one issue, one item can act as that straw that breaks the camel's back we are seeing equity equity market sell-off as a result of worries arounding banks so where are y

within the u, there is a very limited presence of silicon valley bank. and of course we are in touch with the relevant national competence authorities. that message was echoed by e. u. finance ministers, including germany's close john lindner harden herb yard, am i gonna auto? we have our own authorities in europe and parked in germany. for example. we have our own financial regulatory body, which is continuously monitoring the situation. these institutions have no doubts whatsoever about stability, things to, to chew on kinds, wife or gelato. let's take a 2nd for it. i have faith in general, brother in the us, the failures have brought back painful memories of the devastating meltdown of 2008 in a bid to lessen uncertainty and divert further. bank runs. you as president joe biden hurried to reassure the public. all customers who had deposited these bank can rest assured i will never rest assured they'll be protected and they'll have access to their money. as of today, no losses will be borne by the taxpayers. instead of the money will come from the fees

the business models like silicon valley bank are different. high concentration of commercial clients with big relationships ours is individuals and small businesses that make that up for us, it is different. in terms of investment, all banks and individuals and banks and corporations have bought fixed rate investments over the years. as interest rates risen, the value has come down. the banks are good at managing the tradeoffs with having long-term investments and generating near-term liquidity i think the fed program that came out on sunday was a real boost to confidence that in case we need to go and pledge assets to generate liquidity for depositors, we will be there with the fed being there the bank is overall in good shape and pleased with the programs announced to date. >> do you have a rough number for uninsured deposits >> it is not a big thing roughly one-third. by any comparison, we would show up very well relative to the industry >> okay. i'm not that well versed in the banking industry, but we have gotten a crash course in banking.

given the size of silicon valley bank, it is reasonable for me to conclude that silicon valley bank was not on the fdic's problem bank list released just three months before its collapse. including the issuance of matters requiring immediate attention from the supervisors were those findings communicated to the fdic's? >> the criteria is to be rated four or five on the scale and at that time it was not rated a four or five so we would have been in the position. >> why wasn't this share for the purpose of the fdic's problem bank list? >> the fdic makes him independent judgment. has the bank ever previously been on the fdic's list of problem banks? >> the reason i hesitate is we don't put the aggregate assets on the problem list. we don't indicate to the individual institutions. >> i believe i can come back and answer your question if i may follow-up for the record. >> the answer is yes. >> we will come back with any answer for you. >> thank you for your testimony. i still think there are lots of questions regarding what happened here especially with silicon valley bank and i appreciate y

the embattled silicon valley bank is no more, not in the official sense the bank that serviced so much of the venture capital bank startups and tech entrepreneurs in america was officially taken over by government regulators today. the department of financial protection and innovation in california moved to shut down svb and then asked the federal deposit insurance corporation or fdic to oversee the bank's winddown as well as oversee the return of deposits to customers. now, the fdic said that all insured deposits will be available to customers, no later than this coming monday morning, march 13th those customers with deposits in excess of the federally insured $250,000 per person, per bank, will receive an advanced dividend payment over the next week with any remaining balance paid contingent upon the selling off of svb's assets. now, shares of the company, depend, have not traded so far today. so, that number that you're seeing up there, 39.40 is not official in that sense but they have been absolutely crushed. they were as high as nearly $600 in the last 12 months and the premarket

after a five-day selloff at silicon valley bank, there were questions of all regional banks. a bounce back of sorts the kre etf is still down 25% over the last week we are looking at some of the names in the etf first republic catered to a simil similar clientele to svb with. pacwest is up 9% we are watching the 2-year tre treasury investors continue to run to bonds for safety a week ago, the 2-year treasury closed above 5%. this morning, that has fallen below 4% prices and yields move inversely. we are watching the yield curve. it is seen as a recession indicator. we have seen reversal. the spread now 46 basis points it is shaping up to be a very interesting morning here on wall street as you were talk about it, the inflation gauge cpi is a data point. jay powell said the fed is watching as they make decision of rate hikes this month now after svb could a hike be off the table? our fed watch tool has even odds, ladies >> frank, thank you for breaking it down. it is remarkable looking at the analyst comments coming through today with the fmoc expectations it feels not a lot o

an email from somebody in silicon valley who went to an atm at the silicon valley bank and could not access it yet let's hope things open in a bit. shareholders and bond holders in svb in watch out and taking over a second risk of signature bank in new york it will backstop its deposits by the federal government and i noted barney frank is on the board of signature bank. it will provide financing across the countryby offering loans for up to a year janet yellen is saying keep your money where it is. it is guaranteed for the next 12 months it may give some of the banks, the smaller banks which may be having trouble, time to get their acts together and get deals. >>> new this morning, hsbc is buying the us silicon valley bank for 1 pound the sale protects the deposits of the silicon valley bank uk clients. and first republic getting additional funding from the fed and jpmorgan $70 billion in liq. all weekend, lots of folks talking if the company would get taken over bankers hired and lots of people looking at the bank. we will keep our eyes on this bank for some time having said that,

they could also make wires in and out of silicon valley bank. and as my colleagues in the field are reporting, the actual brick and mortar branches here in california opened up at 9 a.m. specific -- 9 a.m. pacific, 12:00 eastern. the treasury stepping into make depositors whole. the question is really what the broader ramifications of confidence are in this sector. kriti: what happens next when you look at the venture community? where do we go from here? ed: there were hundreds of signatories to that letter. we had them on the show earlier saying that list has now grown to 600 signatures. the thing that still needs to be answered is, how does this whole sector do banking going forward and who does it do banking with the echo silicon valley bank was not just where vcs put deposits. they relied on it for a lot of services. it was the first bank to take risk on early-stage companies. the first person or bank a founder would go to. it would take calls when other main street banks would not, or wall street firms would not either. that is a big questi

and silicon valley had 2.5% of their deposit mix in core consumer goes sents. your typical big bank has anywhere from 30-50% of deposits in this core consumer deposit area which are very safe, very sticky and don't run out of a bank at the first sign of stress. very different than the silicon valley makeup, and that's why we think on these types of, the downdraft from this problem, this is the time to buy quality names like jpmorgan chase, bank of america mmt bank, many of these. cheryl: keith, last word to you with. i do want to switch gears over to the jobs report for the month of february. we didn't get that big january revision that a lot of us were expecting, myself included. but at the same time, we kid get an interesting headline, and the focus really became on the wages. wages rose 4.6% annually below the forecast, a little bit higher from january. so it really is that story as we look at 504,000 jobs, you know, that -- well, that was for january. but for february, 311,000 jobs, and the unemployment rate ticking up to 3.6%. but back to that wage story,

if there was a run on the bank as we've seen it with silicon valley bank. how serious is this class? are we looking at the start of the next financial crisis? well, i mean, that remains to be seen. most experts i've talked to are saying that specially the big bangs in the united states, for instance, are safe for now. but actually what caught them all this term in the beginning was also that, for instance, the federal reserve increased interest rates very aggressively in the past year. on the other side, that meant that the price is for treasury. it's for a bond to got to under a lot of pressure. we're talking about unrealized. lots of us banks at unrealized losses of about $8000000000.00 by the end of $21.00. then we started this cycle off increasing interest rate. so now us things are sitting on unrealized losses in the amount of $620000000000.00. that is no problem as long as clients are not putting their money. so now we have to see if we see more, a bank runs in the days and weeks to come. so janet ellen has rolled out a bailout. what does that mean fo

not silicon valley bank, of silicon valley. everyone needs to be clear on that. this was not a bail out of hard working americans with small accounts. this was a bank that only catered for the most part to silicon valley and their customers. how did silicon valley get so big? all the money at the beginning of the pan pandemic. 90% were pure crap the others went out overvalued. everyone who bought them at the ipo price. every american is losing money right now. all that money went to silicon valley bank. their deposits went up to 200 billion. the average bank over that same time went up 35%. they are living large and having a great time. what do they do with the money? they don't lend it out. who the hell needs a loan in silicon valley. they don't lend it out. they put it into different things and start investing with it. they say let's buy these bonds. this is the tricky part and i think the overall market will get hammered this morning. when banks put the bonds -- two ways to put bonds on your books. one is held to maturity. if you do that you don't have to mark