It’s the same thing that happened back during that weekend of September 13–14, 2008 at the beginning of the Great Recession as college students were in class while AIG, Lehman Brothers, Merrill Lynch all crashed looking for financial relief from companies like Bank of America and JP Morgan Chase. It would create a jobless dystopia reality for the college graduates coming into the same financial world only 6 months later, having to pay back student loans that were due at the same time. How can you graduate and be broke before you get employed? We just explained it. The companies that were supposed to employ the fresh out of college Americans did not have any money for new hires. They spent the money helping rich people to stay rich as the rest of the nation voted in the first Black President. He ran on a campaign filled with hope.
The rest of our adult lives have looked like this: instability, job losses, recovery, reversal. While many of us managed to reenter the labor force after losing jobs, our earnings have taken permanent hits. We lost a larger proportion of our earnings from the Great Recession than any other adult generation, and by entering the workforce at a time of cut wages and more competition, we were set up for a lifetime of lower earnings and less savings.
Jill Filipovic, CNN
Silicon Valley Bank and Signature Bank were banks setup to help start-up businesses and venture capitalists. They would be the “dreamers” bank of the American dream, the entrepreneurs, the innovators driving global competition, but they are still the new guys on the block. A lot of their client base were small-mid sized American b2b businesses used for payroll management and daily cash management. It’s the type of accounts that need to stay active to keep the lights on.
So what had happened?
The following statement was released on March 12th, 2023 by Secretary of the Treasury Janet L. Yellen, Federal Reserve Board Chair Jerome H. Powell, and FDIC Chairman Martin J. Gruenberg:
Today we are taking decisive actions to protect the U.S. economy by strengthening public confidence in our banking system. This step will ensure that the U.S. banking system continues to perform its vital roles of protecting deposits and providing access to credit to households and businesses in a manner that promotes strong and sustainable economic growth.
After receiving a recommendation from the boards of the FDIC and the Federal Reserve, and consulting with the President, Secretary Yellen approved actions enabling the FDIC to complete its resolution of Silicon Valley Bank, Santa Clara, California, in a manner that fully protects all depositors. Depositors will have access to all of their money starting Monday, March 13. No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer.
We are also announcing a similar systemic risk exception for Signature Bank, New York, New York, which was closed today by its state chartering authority. All depositors of this institution will be made whole. As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer.
Shareholders and certain unsecured debtholders will not be protected. Senior management has also been removed. Any losses to the Deposit Insurance Fund to support uninsured depositors will be recovered by a special assessment on banks, as required by law.
Finally, the Federal Reserve Board on Sunday announced it will make available additional funding to eligible depository institutions to help assure banks have the ability to meet the needs of all their depositors.
The U.S. banking system remains resilient and on a solid foundation, in large part due to reforms that were made after the financial crisis that ensured better safeguards for the banking industry. Those reforms combined with today’s actions demonstrate our commitment to take the necessary steps to ensure that depositors’ savings remain safe.
The democrats bailed out the rich, again. But they’re not really rich, they were on their way to being rich.
