There had been fears following SVB's demise for First Republic's future when analysts pointed out the similarities between the estimated value of their assets versus the actual value.
The news of Silicon Valley Bank's collapse sent shockwaves through the wine industry. It had been the main financial institution for wineries in California for almost three decades.
The California Department of Financial Protection and Innovation closed the bank on Friday after depositors, concerned about the lender's financial health rushed to withdraw their deposits. The frenetic two-day run on the bank blindsided observers and stunned markets, wiping out more than $100 billion in market value for U.S. banks.
By Friday night, thousands of wineries in northern California found that they were completely locked out of their accounts with no clear timeline as to when they might be able to access their funds.
Billionaire hedge fund manager Bill Ackman is forecasting 'economic meltdown' within hours of the banks opening up on Monday morning following the failure of Silicon Valley Bank.
Ackman is urging for the U.S. government to finally step in and protect all of the bank's depositors, warning inaction could lead to a ripple effect across other smaller banks within the industry.
The worry is that customers will rush to withdraw cash from their accounts fearing instability across the banking system with the very real possibility of a domino effect.
Ackman is urging the government to take action and fix a 'a-soon-to-be-irreversible mistake' by Monday morning, to prevent such a bleak scenario from occurring.
His ominous warning came hours after Greg Becker, the chief executive of SVB Financial Group, sent a video message to employees of the bank acknowledging the 'incredibly difficult' 48 hours leading up to its collapse on Friday.
'It's with an incredibly heavy heart that I'm here to deliver this message today,' he said in a video. 'I want to acknowledge how hard the last 48 hours have been on all of you. I care so much about all of you. It really is so incredibly difficult.
'I am trying to look past to focus on two things. 1.) I am focusing on you and thinking about the ultimate outcome of what this could be despite this incredibly difficult time. And 2.) I'm focusing on clients.'
Silicon Valley Bank's collapse on Friday was the worst U.S. financial institution failure since the Great Recession, with $209 billion in total assets at the end of 2022.
The bank, which was the 16th largest bank in the U.S, failed after a 60 percent drop in shares due to declining customer deposits, forcing SVB to sell off $1.75 billion in shares.
While the FDIC has taken control of the lender, Becker said he is working with banking regulators to find a partner for the bank, but there is 'no guarantee' a deal will be struck.
As you heard this morning, I'm not making those decisions anymore, which is really hard. But I am working with the FDIC to work out how we come up with the best outcome for our clients as well as out employees.
'I can't imagine what was going through your head and wondering, you know, about your job, your future. My goal is how to figure out how to preserve a small portion of the franchise value that we have spent so much time building and hopefully find the right partner that the FDIC can work with to have this institution continue with some form or fashion.'
He asked employees to 'hang around, try to support each other, try to support our clients, work together' to get a better outcome for the company.
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