Moving Cash Is Faster Than Ever. It Makes Bank Runs Hard To Stop.

The NPR Politics Podcast

NPR

Politics, Daily News, News

4.5 • 24.9K Ratings

🗓️ 23 March 2023

⏱️ 17 minutes

🔗️ Recording | iTunes | RSS

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Summary

Top monetary officials including Federal Reserve chair Jerome Powell and Treasury Secretary Janet Yellen say things have stabilized in the two weeks since panicked depositors rapidly withdrew their money from Silicon Valley Bank and Signature Bank, causing both to fail. But on top of revisiting recently relaxed banking regulations, policy makers are pondering how to handle the risk of bank runs in the age of smartphone banking.

This episode: White House correspondent Asma Khalid, chief economics correspondent Scott Horsley, and national political correspondent Mara Liasson.

The podcast is produced by Elena Moore and Casey Morell. It is edited by Eric McDaniel. Our executive producer is Muthoni Muturi. Research and fact-checking by Devin Speak.

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Transcript

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0:00.0	Hey there, it's the NPR Politics Podcast.
0:06.4	I'm a small collie that I cover the White House.
0:09.0	The time is 139 pm on Thursday, March 23rd of 2023.
0:15.0	And today on the show, we're going to try something a little different.
0:18.5	A couple of weeks ago, you may have never heard of Silicon Valley Bank.
0:22.4	It was the 16th largest bank in the country, mostly dealing with startup, small businesses
0:26.6	backed by venture capital, that sort of tech sector money.
0:29.6	And suddenly, Silicon Valley Bank seemed to be in the news nonstop.
0:34.3	Silicon Valley Bank, the 16th largest bank in the US, has collapsed.
0:38.4	It's the culmination of a dramatic 48 hours, so it went as to run on the bank.
0:42.0	What mostly happened?
0:43.0	CEO said it had sold off a significant part of its bond portfolio to be able to handle these
0:47.8	withdrawal requests.
0:48.8	And it took a massive hit doing that, and nearly $2 billion loss.
0:53.0	There was a sudden run on the bank.
0:54.8	It was sparked by a financial newsletter that suggested the bank was basically insolvent
0:59.1	because rising interest rates made its bond investments less valuable.
1:03.2	Then another bank, closely tied to cryptocurrencies, signature bank in New York, went under two.
1:08.8	President Biden and his Treasury Secretary Janet Yellen sought to comb the situation quickly.
1:14.0	No losses will be borne by the taxpayers.
1:19.5	I'm going to repeat that.
1:20.5	No losses will be borne by the taxpayers.
	...

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