Good, they would’ve gone under otherwise. The Treasury et al. took the clearly responsible step of approving a systemic risk exception for SVB and Signature. This was truly existential crisis of confidence in the US banking system. A depression on par with the 1929s would have been underway had these decisive actions not taken. Thank the lord competent people still run the Fed, Treasury, and FDIC.
Yeah they did a pretty good job to restore confidence. Now I want to see the next stage of the short sellers' plan. It would be weird if they only managed to draft up a one stage plan.
There are already alleged short sellers like him who are causing 'bogus fud'.
There is a large gap in First Republics loan book and deposits. They have effectively subsumed all their equity on their balance sheet, if they are forced to mark their assets at market value. The same situation that happened to SVB is true right now at First Republic. However, the Fed and JPM believe that depositors won’t run on the bank if their is sufficient liquidity with these actions. So, no they weren’t in a good place, but they’re a little more stable now. Still somewhat risky however given there is a large effective gap in liabilities and assets.
Monday will be interesting in America, will it be a re-run of 2008/09 or not?
It shouldn’t be. These banks are not sitting on toxic assets the same way large financial institutions were in 2008. The existing programs and powers of the Federal Reserve and Treasury should be more than sufficient to eliminate a widespread financial crisis.