The Silicon Valley Bank collapse continues to dominate headlines in the financial world. The US Federal Reserve is facing flak for missing what according to observers are clear signs of the lender being at high risk of collapsing. Despite stinging criticism, the Fed is reconsidering regulations concerning the midsize banks which could mean the expansion of existing restrictions currently only affecting larger Wall Street firms.
Here are the top developments around the second biggest bank collapse in the history of United States.
1. The bank’s new chief executive officer (CEO) Tim Mayopoulos has urged the lender’s top venture capitalists to move their deposits to its newly created bridge entity, Reuters reported. He was roped in by the Federal Deposit Insurance Corporation (FDIC) after the regulator took control of the bank. He told clients deposits at the bank were now among the safest of any U.S. banks or institutions.
2. 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.
3. Gold witnessed 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, Bloomberg reported.
4. Oil prices surged 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.
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5. Global accounting firm KPMG said it stands behind its audits of Silicon Valley Bank and Signature Bank, the Financial Times reported. 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.
(With Reuters, Bloomberg inputs)