The Silicon Valley Bank failure may not be the only bank to fail per some experts in the field.
The Silicon Valley Bank failed while the executives at the bank sold their shares before the failure – an obvious misuse of insider information.
Having insiders like these executives gives you an idea of the ethics in the management at the bank. These individuals may be in serious trouble.
Others were not so lucky.
There are fears that the Silicon Valley Bank may not be the last bank to fail in 2023.
Fears were mounting on Friday for the future of First Republic Bank, after the collapse on Friday of Silicon Valley Bank and the resulting ripple effect.
Silicon Valley Bank, the 14th largest in the United States, specialized in supporting tech businesses and has been hard-hit by both the economic conditions and inflation.
On Friday it was taken into government control, and executives are hoping that another financial institution will step in to keep the bank afloat.
Other banks were rattled by the demise of Silicon Valley Bank – among them First Republic, the 16th largest, whose shares plummeted 50 percent on Friday, before closing 15 percent down.
First Republic issued a statement in the late morning seeking to calm investors, pointing to its ‘continued safety and stability and strong capital and liquidity positions.’
The problem for depositors in banks with balances greater than $250,000 is that these balances are not insured by the FDIC. These balances would be classified as creditors when a bank fails.
Andrew Yang warns that there could be massive layoffs in the tech sector if the government doesn’t step in.
Andrew Yang, the entrepreneur who grabbed national attention during his 2020 White House run and his 2021 New York City mayoral run, urged government intervention following the Silicon Valley Bank (SVB) collapse, warning of potential mass layoffs in the near future and a “financial contagion.”
“In the absence of some kind of action you’ll see thousands of mass layoffs and defunct companies, a wiped out generation of start-ups.” Yang warned.
This could be the beginning of another 2008 or even worse.