The U.S. government and the Federal Deposit Insurance Corporation (FDIC) are auctioning off two failed American financial institutions, Silicon Valley Bank (SVB) and Signature Bank (SNBY), this week, with bids due by March 17. However, sources familiar with the matter said the qualifications to purchase the banks are stringent, and reportedly, the purchasers cannot deal with crypto businesses anymore.
Last week, the second- and third-largest bank failures in America occurred within 48 hours of each other, and the two financial institutions are being sold this week. Unnamed sources familiar with the matter told Reuters that the FDIC is accepting bids for Silicon Valley Bank (SVB) and Signature Bank (SNBY), with final offers due on Friday, March 17, 2023. The FDIC already attempted to auction off SVB last weekend, but no deals materialized, and the U.S. government proposed a bailout plan for the depositors of both banks.
Sources disclosed that the FDIC is using the investment bank Piper Sandler Companies to manage the auctions of both banks. The sources added that the FDIC hopes to sell both SVB and SNBY in their entirety, but partial offers on specific bank branches and verticals will be considered. To purchase the two financial institutions, strict rules apply, as only an existing chartered bank can submit an offer. Reuters contributors David French and Pete Schroeder were told that the scheme was designed to give traditional lenders “an advantage” over private equity companies.
The reporters were also informed that bidders must not cater to cryptocurrency firms if they are to acquire SVB and SNBY. “Any buyer of Signature must agree to give up all the crypto business at the bank, the two sources added,” the report by French and Schroeder details. The Reuters account of the situation, stemming from unnamed sources, contradicts the statement made by the New York State Department of Financial Services.
The New York regulator insisted that the recent bank shutdowns had “nothing to do with crypto.” The regulator made this statement after Signature Bank board member and former member of the U.S. House of Representatives from Massachusetts Barney Frank said he suspected the shutdown was an “anti-crypto” message. If the rules concerning purchasing SVB and SNBY are true, then it seems Frank’s suspicions may be warranted.
Do you think the FDIC’s alleged decision to restrict bidders from dealing with cryptocurrency businesses is justified, or do you believe it unfairly disadvantages potential buyers? Share your thoughts in the comments section below.
Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today.
Image Credits: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
Oman to Incorporate Real Estate Tokenization in Virtual Assets Regulatory Framework
Real estate tokenization is set to be incorporated into Oman Capital Markets Authority (OCMA)'s virtual asset regulatory framework. According to an advisor with the authority, the tokenizing of real estate will open investment opportunities for local and foreign investors. Real ... read more.
The U.S. government and the Federal Deposit Insurance Corporation (FDIC) are auctioning off two failed American financial institutions, Silicon Valley Bank (SVB) and Signature Bank (SNBY), this week, with bids due by March 17. However, sources familiar with the matter said the qualifications to purchase the banks are stringent, and reportedly, the purchasers cannot deal with crypto businesses anymore.
Last week, the second- and third-largest bank failures in America occurred within 48 hours of each other, and the two financial institutions are being sold this week. Unnamed sources familiar with the matter told Reuters that the FDIC is accepting bids for Silicon Valley Bank (SVB) and Signature Bank (SNBY), with final offers due on Friday, March 17, 2023. The FDIC already attempted to auction off SVB last weekend, but no deals materialized, and the U.S. government proposed a bailout plan for the depositors of both banks.
Sources disclosed that the FDIC is using the investment bank Piper Sandler Companies to manage the auctions of both banks. The sources added that the FDIC hopes to sell both SVB and SNBY in their entirety, but partial offers on specific bank branches and verticals will be considered. To purchase the two financial institutions, strict rules apply, as only an existing chartered bank can submit an offer. Reuters contributors David French and Pete Schroeder were told that the scheme was designed to give traditional lenders “an advantage” over private equity companies.
The reporters were also informed that bidders must not cater to cryptocurrency firms if they are to acquire SVB and SNBY. “Any buyer of Signature must agree to give up all the crypto business at the bank, the two sources added,” the report by French and Schroeder details. The Reuters account of the situation, stemming from unnamed sources, contradicts the statement made by the New York State Department of Financial Services.
The New York regulator insisted that the recent bank shutdowns had “nothing to do with crypto.” The regulator made this statement after Signature Bank board member and former member of the U.S. House of Representatives from Massachusetts Barney Frank said he suspected the shutdown was an “anti-crypto” message. If the rules concerning purchasing SVB and SNBY are true, then it seems Frank’s suspicions may be warranted.
Do you think the FDIC’s alleged decision to restrict bidders from dealing with cryptocurrency businesses is justified, or do you believe it unfairly disadvantages potential buyers? Share your thoughts in the comments section below.
Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today.
Image Credits: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
Oman to Incorporate Real Estate Tokenization in Virtual Assets Regulatory Framework
Real estate tokenization is set to be incorporated into Oman Capital Markets Authority (OCMA)'s virtual asset regulatory framework. According to an advisor with the authority, the tokenizing of real estate will open investment opportunities for local and foreign investors. Real ... read more.
Credit Suisse has experienced a loss of confidence in the financial institution’s health following a significant drop in its shares’ value this week. Over the past five days, Credit Suisse shares have fallen 24.34% against the U.S. dollar, eroding trust amid fears about the global banking system. On Wednesday at around 9 p.m. (ET), Credit Suisse announced that it was strengthening its liquidity by borrowing 50 billion Swiss francs ($54 billion) from the Swiss National Bank (SNB). As concerns about the world’s banking system continue to spread, bailout measures are starting to emerge in the U.S. and abroad.
Credit Suisse’s stock hit a record low on Wednesday after the Saudi National Bank declined to assist the Zürich, Switzerland-based bank. The bank’s troubles have fueled fears of bank contagion after three major U.S. banks collapsed last week. Some market strategists predict that Credit Suisse will be the next to fail, and the actual value of Credit Suisse’s share price has been called into question. After a tumultuous day on Wednesday, Swiss officials announced that they were working to stabilize the financial institution. Both the Swiss National Bank and FINMA issued statements of support.
JUST IN: Swiss National Bank will bail out Credit Suisse if needed.
— Sasha Hodder (@sashahodler) March 15, 2023
Shortly after 9 p.m. Eastern Time, Credit Suisse issued a press release announcing that it had taken “decisive action to pre-emptively strengthen liquidity.” Credit Suisse stated that it intended to exercise the bank’s option to borrow up to CHF 50 billion from the Swiss National Bank (SNB) under a Covered Loan Facility, as well as a short-term liquidity facility, both of which would be fully collateralized by high-quality assets. The company also announced public tender offers for U.S. dollar-denominated senior debt securities and euro-denominated senior debt securities, with an expiration date of March 22, 2023, subject to terms and conditions.
“These measures demonstrate decisive action to strengthen Credit Suisse as we continue our strategic transformation to deliver value to our clients and other stakeholders,” the bank’s CEO Ulrich Koerner said in a statement. “We thank the SNB and FINMA as we execute our strategic transformation. My team and I are resolved to move forward rapidly to deliver a simpler and more focused bank built around client needs.”
Credit Suisse get a $54,700,000,000 bailout.
This is more than the GDP of the majority of the world's countries and should keep them going for a few more days.
— David Kurten (@davidkurten) March 16, 2023
The SNB bailout of Credit Suisse marks the second major bank bailout in less than a week, following the bailout of Silicon Valley Bank (SVB) and Signature Bank (SNBY) by the U.S. Federal Reserve, Treasury, and Federal Deposit Insurance Corporation (FDIC). However, U.S. politicians are emphasizing that these emergency measures are not comparable to the bank bailouts of 2008.
During the Great Recession, bank bailouts were widespread, starting with Bear Stearns’ injection of capital in March 2008 in the U.S. and then spreading abroad. In the U.K., the Royal Bank of Scotland and Lloyds TSB received government assistance in October 2008, while in Iceland, the government nationalized the country’s three largest banks that same month.
At that time, other countries, including Germany, France, and Switzerland, implemented various bailout measures during the 2008 financial crisis. The U.S. allowed the troubled investment bank Lehman Brothers to fail, but decided to bail out Fannie Mae, Freddie Mac, and AIG in 2008. Credit Suisse was one of the few banks that managed to survive the impact of the 2008 economic crisis without a bailout from the Swiss central bank.
While many banks sought bailouts during the Great Recession, Credit Suisse raised capital from the Qatar Investment Authority and other sources by selling convertible securities and initiating a public share offering. Although the current macroeconomic environment is not exactly the same as in 2008, some experts predict that this economic downturn could be worse. This time around, Credit Suisse’s hand was forced, and the bank had to borrow 50 billion Swiss francs or possibly face the same fate as SVB and SNBY.
What do you think will be the long-term impact of Credit Suisse’s bailout on the global banking system? Share your thoughts in the comments section below.
Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today.
Image Credits: Shutterstock, Pixabay, Wiki Commons, pichetw / Shutterstock.com
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
SEC Risks Violating Admin Procedure Act by Rejecting Spot Bitcoin ETFs, Says Grayscale
Grayscale Investments' CEO explains that the U.S. Securities and Exchange Commission (SEC) could potentially violate the Administrative Procedure Act by not approving a spot bitcoin exchange-traded fund (ETF). SEC Approving Spot Bitcoin ETF Is 'a Matter of When and Not ... read more.
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