SVB Crisis: New CEO Urges Venture Capital Clients To Move Deposits Back—Key Developments

The collapse of Silicon Valley Bank, which represents the largest banking failure since the height of the Great Recession in 2008, has spooked the markets globally. The US Federal Reserve has also under criticism over missing what according to observers are clear signs of the lender being at high risk of collapsing. The Fed acted as the primary federal supervisor of the Santa Clara-based bank in California that collapsed last week. The bank was also overseen by the California Department of Financial Protection and Innovation.

Despite coming under attack, the Fed is reconsidering regulations concerning midsize banks which could mean the expansion of existing restrictions currently only affecting larger Wall Street firms.

Here are the top developments after SVB failure

The bank’s new chief executive officer (CEO) Tim Mayopoulos has asked the lender’s top venture capitalists to move their deposits to its newly created bridge entity, Reuters reported. The Federal Deposit Insurance Corporation (FDIC) brought in Mayopoulos after it took control of the bank. He told clients that deposits at the bank were now among the safest of any US banks or institutions.

ALSO READ: SVB Crisis: Check The List Of Companies Impacted By US Bank Collapse

A top US government official has said that the White House is carefully monitoring developments at First Republic and other smaller banks after actions to protect the depositors following SVB’s collapse. This comes a day after the Moody’s Investors Service downgraded First Republic Bank and five other lenders, citing concerns over their reliance on uninsured deposit funding and unrealised losses in the asset portfolios.

Gold witnessed an early decline after US consumer price data came in line with expectations. The precious metal is still holding above the price of $1,900 an ounce after more than a five per cent surge over the previous three sessions, according to the news agency Bloomberg report.

Oil prices moved up from its lowest close in three months, with the West Texas Intermediate climbing towards $72 a barrel after losing seven per cent over the previous two sessions, as per the Bloomberg.

Global accounting firm KPMG said it stands behind its audits of Silicon Valley Bank and Signature Bank, reported the Financial Times. The firm’s US boss Paul Knopp said that the audit work considered all the facts available at the time and that the market-driven events led to the banks’ failures.

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