NFT Collection The Superlative Secret Society Price, Stats, and Review
Paradigm leads $82m raise for crypto payments firm Mesh
Terra Luna Classic Hit Major Burn Milestone, LUNC Price Breakout Imminent?
TWAP Orders on Cow DAO Cross $1 Billion Mark
Bitwise launches Bitcoin corporate treasury ETF
NEAR Protocol and RSS3 Partner to Boost Decentralized Web
Bitcoin could retrace to $72K, matching election lows, analysts predict
Ukraine agrees to US proposal for a 30-day truce: Will Bitcoin rally?
Department of Housing and Urban Development Exploring Use of Blockchain and Stablecoins To Track Grants: Report
Bitwise Launches OWNB ETF To Track Institutions Holding Bitcoin
Coinbase Gets Green Light To Operate in India After Receiving Approval From Regulators
Breaking: Franklin Templeton Files S-1 For XRP ETF With US SEC
Cantor Fitzgerald Launches $2 Billion Bitcoin Financing Initiative
BNB Bulls Take Charge: Price Rebounds Strongly After Recent Dip
U.S. banking lawyer: Stablecoins need regulation similar to banks
Ripple (XRP) Short Traders Deploy $200M Leverage as SOL and ADA Prices Hit Record Lows
US Stablecoin Bill Updated Before Crucial Senate Vote
5 Crypto Price Predictions From Top Traders: Bitcoin, XRP, Ethereum
XRP Price Prediction: XRP Volatility Sees Smart Money Rotate Into Promising Token as ICO Sees $10.9M Inflows
Is It Possible to Turn $100 Into $100K During Crypto Market Crash Before April?
Earn $122,222 a day, launch a sustainable and simple cloud mining platform, lead the industry change
BlackRock CEO Issues Inflation Warning, Says President Trump’s ‘Nationalistic’ Policies To Trigger Higher Prices
TRUMP, MELANIA, LIBRA, and more – Are memecoins now all about ‘influence for sale?’
Bitcoin ETFs Suffer $369 Million Outflow Amid Six-Day Withdrawal Streak
Circle cuts cross-chain USDC settlement to seconds with CCTP v2
New Bank Run Already Underway at Second Regional Bank After SVB Collapse, Says Investor David Sacks

Former PayPal executive, tech investor and entrepreneur David Sacks says another bank run is already underway at a second regional bank following the abrupt collapse of Silicon Valley Bank.
In a new interview with UnHerd, Sacks says he knows of at least one other bank that is already facing mass withdrawals from corporate clients.
“I already know of at least one other bank, I don’t want to say the name, but the runs have already started. It’s a regional bank and then there’s a list of other ones.
You can look and see which regional banks, their stocks were down 20% on Thursday and Friday because the market was throwing the question of whether the SVB problem would spread.”
When asked specifically whether he’s talking about customers who are already withdrawing funds in large amounts or whether people are preparing to withdraw on Monday, Sacks said the answer is both.
“Both. The thing to understand is this is more of a business banking phenomenon. I think this is less about the consumer side. The issue with business banking is that the $250,000 FDIC insurance limit isn’t really adequate for a business account.
If you think about the situation we had 100 years ago in the US before FDIC came along, is that every decade we would have panics. We would have runs on the bank all the time. It was a frequent problem. All it would really take to get started was a rumor that a bank was having problems and people would go race to get their money out and it would become a self-fulfilling prophecy. This type of thing roiled the American economy for decades until it eventually led to a bank collapse and in 1933 they implemented FDIC.”
Sachs says it’s simply safer for businesses to pull their money out of a smaller bank and transfer it to a larger, too big to fail bank, knowing the Fed is more likely to step in and offer unconditional support to a big bank that’s in trouble.
Sacks says the root problem is the fact that FDIC-insured bank accounts are only insured for up to $250,000.
“$250,000 is just not enough of an amount, so if you’re a business who banks at a bank and you have reason to believe that it might be insecure, you’re going to race to take your money out.
You have to think of the game theory here, which is that if it turns out to not be true and the bank is fine, you can just move your money back there in a couple weeks. There’s no penalty for just transferring all your money out. But if the rumor is right, you might save 100% of it.”
Global markets are waiting to see how the U.S. Treasury will respond on Monday and whether the Biden Administration will guarantee that all depositors at Silicon Valley Bank will be made whole.
SVB collapsed last week after the bank revealed $1.8 billion in losses, mainly from selling US bonds that lost much of their value due to the fed’s aggressive rate hikes.
Treasury secretary Janet Yellen appeared on Face the Nation on Sunday, and said a 2008-style bailout of SVB is not possible.
“Let me be clear that during the financial crisis, there were investors and owners of systemic large banks that were bailed out, and we’re certainly not looking, and the reforms that have been put in place means that we’re not going to do that again.
But we are concerned about depositors and are focused on trying to meet their needs.”
Don't Miss a Beat – Subscribe to get crypto email alerts delivered directly to your inbox
Check Price Action
Follow us on Twitter, Facebook and Telegram
Surf The Daily Hodl Mix
Check Latest News Headlines
 

Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Featured Image: Shutterstock/Oleksiy Mark
The post New Bank Run Already Underway at Second Regional Bank After SVB Collapse, Says Investor David Sacks appeared first on The Daily Hodl.