$13 Billion In Silicon Valley Bank Bailout Money Went To Just 10 Accounts | Eastern North Carolina Now

    Publisher's Note: This post appears here courtesy of the The Daily Wire. The author of this post is Ben Zeisloft.

    Federal Deposit Insurance Corporation Chairman Martin Gruenberg revealed on Monday that the firm guaranteed as much as $13.3 billion in uninsured deposits for the 10 largest account holders at the defunct Silicon Valley Bank.

    The implosion of Silicon Valley Bank, where the vast majority of account balances exceeded the $250,000 threshold backed by the FDIC, prompted the government-backed company to secure all accounts in order to prevent additional bank runs. Silicon Valley Bank had been forced to sell a long-term bond portfolio at a substantial loss to cover deposit requests.

    Gruenberg testified before the Senate Banking Committee that some $18 billion from the Deposit Insurance Fund was used to guarantee accounts at Silicon Valley Bank, while another $1.6 billion was taken from the Deposit Insurance Fund to back accounts at Signature Bank, which collapsed shortly after Silicon Valley Bank as large depositors withdrew their balances. The Deposit Insurance Fund is filled with fees on banks rather than taxpayer dollars.

    Gruenberg also revealed that $13.3 billion of the $18 billion allocated to protect Silicon Valley Bank, or nearly 74% of the funds used to assist the customers, were used to back deposits for a mere 10 accounts. "The systemic risk determination enabled the FDIC to extend deposit insurance protection to all of the depositors," he told lawmakers. "The depositors protected by the guarantee of uninsured depositors included not only small and mid-size business customers but also customers with very large account balances."

    A number of large companies kept sizable amounts of their cash assets with Silicon Valley Bank: Roku, which manufactures digital media hardware, maintained a balance of $487 million, while BlockFi, a bankrupt cryptocurrency lender, had $227 million in funds, and SunRun, a residential solar company, had $80 million in deposits, according to a report from Reuters.

    Gruenberg added that the financial system "remains sound" despite the volatility of the past several weeks but noted that some banks are witnessing higher levels of withdrawals.

    "Banks report instances of corporate depositors, in particular, moving some or all of their deposits to diversify their exposures and increase their deposit insurance coverage. Banks have also reported clients moving their deposits out of the banking system and into government money market funds," he told lawmakers. "In general, the largest banks appear to be net beneficiaries of deposit flows, increasing the amounts on deposit, or held in custody, at the global systemically important banks and at large regional banks."

    Funds have indeed been flowing toward larger financial institutions amid uncertainty about the status of some medium-sized banks, prompting concerns about increased consolidation in the banking sector. Treasury Secretary Janet Yellen vowed in remarks to the American Bankers Association last week that moves similar to the one which protected Silicon Valley Bank customers "could be warranted if smaller institutions suffer deposit runs that pose the risk of contagion." Investors saw her comments as an implicit guarantee of all deposits, but the official later told the Senate Appropriations Committee that she has "not considered or discussed anything" related to "blanket insurance or guarantees of all deposits."

    The bond portfolio sold by Silicon Valley Bank had declined substantially in value amid Federal Reserve actions to hike interest rates. Assets in the banking system are now $2 trillion lower than their book value as a result of the rollback in monetary stimulus, which had been previously maintained to stimulate the economy during the lockdown-induced recession, according to a study from analysts at the National Bureau of Economic Research.

poll#170

Considering what has happened to our Representative Republic since the corruptive orthodoxy that led to the tolerated abomination - The Russia Hoax - where felonies were perpetrated upon the American People by the creation of the Two Tiered Justice System, in the misnomer of "Social Justice:" Where do you stand on sustaining our constitutionally guaranteed freedoms in a society where injustice is chronically sanctioned by one political orthodoxy?

  I believe in a perfected society by employing a higher governmental authority to train the behavior of the public.

  The United States Constitution does not allow just a few freedoms, it guarantees ALL freedoms promised to Humankind by God.

  Just don't take away my Social Media.

420 total vote(s)     What's your Opinion?

poll#173

In the face of a known scandal finally being revealed by the corrupt Legacy Media regarding Joe Biden, his Mishandling of Classified Documents and his long history of Influence Peddling to our Foreign Adversaries for Personal and Familial Profit: What do you believe the outcome will be in America's Leftist practice of a Two Tiered Justice System?

  Nothing will happen since the Democratic Socialist Left is corrupt to the core, and their non patriot ambitions are only the control of power.

  Justice WILL be served, but NOT without a tremendous fight by those willing to save the Republic.

  Why can't everyone else understand that the Left is special because we care so much for our own, especially the well being of the president and his family, especially Hunter.

  What difference does it make; I am a product of a failed public education system.

469 total vote(s)     What's your Opinion?

poll#154

Inarguably, the policies of the Democrats in congress and Joe Biden as the Executive is plunging the United States into a recession, if we are not already there; a recession that was completely avoidable. Will abrupt changes in policies occur in time?

  Yes, the Democrats have a bold plan, yet to be revealed, to save us.

  No, there will have to be a complete undoing of the damage done by these Democrats.

  I can't do simple math, so how am I to understand the concept of basic economics.

1,216 total vote(s)     What's your Opinion?