by James Rickards
Daily Reckoning
Most of us recall the banking crisis of March to May 2023.
It began with the collapse of the little-known Silvergate Bank on March 8. This was followed the next day by the collapse of the much larger Silicon Valley Bank (SVB) on March 9. SVB had over $120 billion in uninsured deposits.
Bank deposits over $250,000 each are not covered by FDIC insurance. Those depositors stood to lose all their money over the insured amount. This would have led to the collapse of hundreds of startup tech businesses in Silicon Valley that had placed their working capital on deposit at SVB.
There were also much larger businesses such as Cisco and at least one large cryptocurrency exchange that had billions of dollars on deposit there. Those businesses would have taken huge write-downs based on the size of their uninsured deposits.