- by Yueqing
- 07 30, 2024
Loading
WHEN ONESVBFDIC bank collapses, the panicked question is often “who’s next?” Other financial institutions can end up exposed because of connections to the collapsed institution, because they employ similar business models or simply because investor sentiment sours. Depositors face losses if their funds are too large to be covered by deposit-insurance schemes.These were precisely the provoked by the (), America’s 16th-biggest lender, after a failed attempt to raise capital and on its deposits on March 10th. Over the weekend rumours spread across social media about potential problems at a handful of other regional lenders. It was easy to imagine nervous corporate treasurers deciding to shift their deposits to the biggest banks, just in case. But on March 12th a joint response by America’s Treasury, the Federal Reserve and the Federal Deposit Insurance Corporation () helped take concerns about depositors off the table, while revealing another banking casualty.