Near Miss: A Bank Collapse and a Crisis Averted 03/13/23

Squawk Pod

CNBC

Business News, News, Investing, Business

4.2 • 543 Ratings

🗓️ 13 March 2023

⏱️ 37 minutes

🔗️ Recording | iTunes | RSS

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Summary

Did we dodge the bullet? Federal agencies on Sunday approved plans to safeguard depositors affected by the collapse of Silicon Valley Bank on Friday, and the Federal Reserve is creating a Bank Term Funding Program to secure financial institutions from instability amid the SVB failure. Squawk Box’s Becky Quick, Andrew Ross Sorkin and Steve Liesman discuss the near-miss, how government action prevented a broader financial crisis, and the moral hazard of the federal action. Alexis Ohanian, venture capitalist and Reddit co-founder, describes the 72 hours of chaos experienced by young, start-up companies following the shutdown of Silicon Valley Bank. The veteran entrepreneur who also funds early-stage companies said venture capitalists raised the alarm but should say “thank you” for the government backstop. And, Camp cp-founder Ben Kaufman runs his business from the funds in his Silicon Valley Bank account; he shares the anxiety he felt over the weekend, looking for a cash infusion. In this episode: Alexis Ohanian,@alexisohanian Ben Kaufman, @benkaufman Steve Liesman, @steveliesman Andrew Ross Sorkin, @andrewrsorkin Becky Quick, @BeckyQuick Katie Kramer, @Kramer_Katie

Transcript

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0:00.0	I'm C. NBC producer Katie Kramer and this is Squawk Pod.
0:07.0	Near miss.
0:09.6	failed Silicon Valley Bank.
0:11.0	The second largest failure in US banking history.
0:13.7	The crisis averted but is it mission accomplished?
0:16.2	Regulators sweep in to contain a financial crisis, two banks closed, another recapitalized
0:21.6	and all uninsured deposits guaranteed across the banking system.
0:25.0	The second time in 20 years.
0:27.0	The failure of once obscure Silicon Valley Bank, the scramble from top names in in Tech and the 11th hour government save.
0:35.5	If this bank, S.B, had been some bank you never heard of in the middle of nowhere that didn't
0:41.5	have clients like Peter Teal and David
0:43.5	Sachs screaming from the rooftops on Twitter. I don't believe that people would
0:47.6	have said it was systemic. Alexis Ohanian, Reddit co-founder and venture
0:52.4	capitalist on his exposure to the bank collapse and social
0:55.9	media's role in the panic.
0:57.9	There's a responsibility borne by every one of us, especially those of us who have platforms
1:02.0	of influence.
1:03.0	And a void for founders and their funds.
1:06.0	What are entrepreneurs supposed to do now?
1:08.0	For these early stage companies, they need a place to bank,
1:11.0	and the Big Four aren't going to be a home for those companies.
1:14.7	Plus will speak to one founder who scrambled this weekend to scrounge up cash, Camps Ben Kaufman.
	...

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