Americans rush to bank branches to withdraw their life savings or demand answers fears of contagion
Customers with accounts at under-pressure banks across the country said they were reassured on Monday after authorities stepped in to protect deposits, even as markets fretted about systemic contagion.
A few dozen account holders waited outside a San Francisco branch of stricken Silicon Valley Bank, which was seized by regulators on Friday after it collapsed, but there was no evident panic.
‘We know that things are in place with the FDIC,’ said Wyatt Boumedine, the chief finance officer of a Silicon Valley start up, referring to a federal deposit protection scheme.
He said his company, which banks with SVB and other institutions, had experienced no difficulties making payroll, and was working to reassure employees that they would not lose out.
‘Yesterday the information coming from the Fed really relieved everybody in (Silicon) Valley… that we will have less issue accessing the funds.’
Customers wait in line to withdraw funds from Silicon Valley Bank’s headquarters in Santa Clara, California on Monday
Customers outside an SVB branch in Wellesley, Massachusetts, after the White House guaranteed people would be able to access their funds Monday morning
The FFIC took control of the SVB bank’s assets, making it the largest bank to do so since the 2008 financial crisis
Outside a New York branch of Signature Bank, which was closed by regulators on Sunday, Edward Tricomi, a hair salon business owner, said ‘We’re staying with the bank.’
‘The key thing, everybody should know this: don’t panic, don’t run on it, because everybody loses. So if everybody just keeps cool, you’ll be alright,’ he added.
Bank stocks have fallen around the world, with even major institutions getting hit as investors worried that the troubles of a few banks could spread.
Governments in Europe and the United States have moved to reassure markets that the world is not in for a repeat of the 2008 financial crisis, when the global banking system seized up.
In a joint statement on Sunday, the US Federal Reserve, the Federal Deposit Insurance Corporation (FDIC) and the Treasury Department said SVB depositors would have access to ‘all of their money.’
Concerned customers outside and SVB branch in Massachusetts on Monday
People line up in front of a First Republic Bank branch during rain in Los Angeles, California
Signature Bank, a New York financial institution with a big real estate lending business that had recently made a play to win cryptocurrency deposits, closed its doors abruptly on Sunday
A huge line formed at First Republic Bank in Brentwood as Californians are tried to withdraw their money from the bank
Customers line up outside a branch of Boston Private Bank and Trust Company, which is owned by Silicon Valley Bank, in Boston, Massachusetts
Account holders at Silicon Valley Bank and Signature Bank were still able to withdraw their money on Monday
There was a long line outside a branch of Silicon Valley Bank in California on Monday
US President Joe Biden on Monday said the sector was secure and Americans could ‘have confidence that… your deposits will be there when you need them.’
Boumedine, who said he was only at the bank to get information, said he was reassured by Biden’s statement.
‘I think that he’s taking the right approach,’ he said.
‘It’s not a systemic issue (and) I have full confidence in the current administration.’
Others in the queue were also sanguine.
‘This is not anything abnormal that hasn’t happened in the past,’ said one investor who declined to give his name.
‘The FDIC said they’re giving all their funds out today, so that’s why I’m here.’
One New York finance worker, who did not want to give his name, said he had come to take the temperature at a branch of First Republic, whose stocks plunged Monday.
The government has promised to back all deposits that had been made with SVB bank
People wait outside the Silicon Valley Bank headquarters in Santa Clara, California, to withdraw funds after the federal government intervened
Customers of distressed banks across the U.S. including SVB as seen here in Santa Clara, California, were reassured on Monday after regulators stepped in to protect their deposits
The line was out the door at SVB in Santa Clara as customers raced to withdraw deposits
Customers waited patiently in line but seemed to be in good spirits generally
Fellow customers chatted and drank coffee while waiting to ever the failed bank
Igor Fayermark of the Federal Deposit Insurance Corporation walks into the Silicon Valley Bank headquarters while people wait outside to withdraw funds
‘When you see there is no line here, it doesn’t seem to be really an issue,’ he said.
‘I think that the government intervening and effectively, backstopping all the depositors in Silicon Valley Bank was helpful in de-escalating any potential issue.’
A sixty-something man leaving First Republic Bank on 51st and Park Avenue in Manhattan on Monday, who did not want his name disclosed because he is a CEO of a company told DailyMail.com that he taken everything out of his account apart from $250,000 in his account – the maximum insured limit of what the FDIC allows – but withdrew the rest of his money today.
Though he would not share the amount he said it was ‘a lot’.
He said he went to the bank this morning, ‘out if an abundance of caution.’
‘I am not hysterical but a bit concerned, but I think the Feds are going to do what they need to do.’
The man said a lot of people who were at the bank this morning were doing the same as him.
Joe Biden spoke before the markets opened this morning, stating: ‘Our actions should give Americans confidence that the US banking system is safe’. It comes after White House yesterday guaranteed it would make SVB customers ‘whole’ and that ‘no losses will be borne by the taxpayer’
First Republic Bank’s shares dropped as low as $21.50 from a high of $81.76 amid fears of a banking rout when Wall Street opens trading at 9.30am. It ended the day at $31.21
Banks and financial institutions that saw trading halted Monday
Bank of Hawaii Corporation
Coastal Financial Corp Cm St
East West Bancorp, Inc.
First Horizon Corporation
Macatawa Bank Corporation
Magyar Bancorp, Inc.
Metropolitan Bank Holding Corp
OceanFirst Financial Corp
Regions Financial Corporation
Washington Federal, Inc.
‘The stock is down 60% it’s tragic, but I don’t think it will spread to a contagion because the Feds are on it.’
‘This feels it could go to a financial crisis, but the big banks are too well capitalized- the Wells Fargo, the BOA, the JP Morgan’s, Morgan Stanley-they get stress tested.
‘The problem is that First Republic did not get stress tested so this is the lesson they are going to learn now. It was foolish. There was a lot of risk. Everyone should be scrutinized.’
‘I am surprised there isn’t a bigger line at the bank today. Everyone is doing the same thing. It’s not smart, but foolish to leave my money in the account that it’s not insured.
‘I could have taken out more, but they have been a phenomenal institution.’
At a branch of First Republic Bank on West 10th Street – one of the smaller branches of the Manhattan’s 11 locations of the San Francisco-based bank, a 30-something man named Anthony was leaving the bank.
He told DailyMail.com the ordeal had been an ‘inconvenience.’
‘I think the Feds will bail them out.’
The man ran to the bank to transfer some of his money out of First Republic to deposit it into another financial institution.
He had been thinking about diversifying but after the news of SVB he felt that there was an urgency to transfer his money out of the bank today.
‘I think that is why everyone is frantic. The bank is trying to reassure their clients that nothing will happen but they don’t know.’
At an another, Christine Mielnik was at First Republic at 51st and Park Avenue.
She said her husband takes care of the banking, but she has some of her own money in a separate account at First Republic. Regardless, she told DailyMail.com that she’s not worried.
‘If the bank fails I am at least protected at least $250,000.’
Source: | This article originally belongs to Dailymail.co.uk
https://www.soundhealthandlastingwealth.com/celebrity/americans-rush-to-bank-branches-to-withdraw-their-life-savings-or-demand-answers-fears-of-contagion/ Americans rush to bank branches to withdraw their life savings or demand answers fears of contagion