The emergency bank rescue that almost didn't happen: A historic rescue of a distressed industry

[riversedge]

I read this entire article--glued to the action and steps and thoughts taken this past weekend. And I will say that anything banking or finances usually does not raise my interest.
Things have yet to begin to settle.





The emergency bank rescue that almost didn’t happen

A historic rescue of a distressed industry came together in 72 hours, reshaping the government’s relationship with banks in far-reaching ways.
https://www.politico.com/news/2023/03/13/the-emergency-bank-rescue-that-almost-didnt-happen-72-hours-00086868





The Silicon Valley Bank’s demise had come as just as much of a surprise to the White House as it did to the public. | Jeff Chiu/AP Photo

By Adam Cancryn, Ben White and Victoria Guida

03/13/2023 08:25 PM EDT

On Sunday afternoon, an exhausted group of Biden administration officials gathered to put the finishing touches on a hastily composed plan to stave off a nationwide banking crisis.

Just a little more than 72 hours had passed since Silicon Valley Bank suddenly collapsed, rocking the tech industry and igniting fears that the U.S. was on the verge of a financial meltdown.

The bank’s demise had come as just as much of a surprise to the White House as it did to the public, triggering a weekend sprint to contain the fallout that spanned several agencies and all hours of the day and night.

The result, announced just minutes before financial markets in Asia reopened, was sweeping: The federal government would provide SVB’s depositors with access to all their funds, effectively averting painful financial uncertainty – and the threat of heavy losses – for thousands of venture-backed startups. Signature Bank, which had followed SVB into insolvency, would receive the same guarantee.

Even more critically, the Federal Reserve would provide a massive lifeline to the nation’s banks: It would singlehandedly give all other similar lenders access to funds designed to keep them afloat and quell the panic brewing across the country.

The swift and forceful action to rescue depositors at the two failed midsize lenders rewrote crucial banking guardrails in ways that could reverberate for years. It put the Biden administration’s stamp — for good or ill — on the sector’s future financial stability, while sending a message about the government’s willingness to rescue private businesses in new ways. It also was done without passing a single new act of Congress or holding hearings among elected officials in recent days..............................................