Total financial meltdown could hit in 12 months warns top economist
On Thursday, depositors rushed to pull their money out. An old-fashioned bank run was underway.
It was the second-biggest bank failure in US history and trickier than most: an astonishing 94 percent of Silicon Valley Bank’s deposits — including large cash holdings by tech startups — were uninsured by the Federal Deposit Insurance Corporation (FDIC), which insures deposits, examines and supervises financial institutions.
The collapse sparked fears that if depositors in the mid-sized lender lost money, others would lose faith in the banking system and rush to withdraw money on Monday, causing a cascading crisis.
These fears were partially realised on Sunday when New York-based Signature Bank, a major lender to New York landlords, also failed and was being seized.
Published at Thu, 16 Mar 2023 15:36:00 +0000