The House Financial Services Committee held a hearing today with top officials from the FDIC to assess the Silicon Valley Bank fallout.
Apparently, the bank run could have been a lot worse.
Here are the details.
It was the quickest run the U.S. had ever seen.
Depositors withdrew $42 billion on March 9, 2023. And they were prepared to withdraw $100 billion the very next day but the bank closed by order of the California Department of Financial Protection and Innovation. And that's when the FDIC stepped in.
$142 billion would have been 81% of SVB's total deposits … in two days.
We're lucky government organizations stepped in when they did. Otherwise, the market effect would have been much larger and many more people would have lost money.
Officials are still evaluating the exposure of remaining U.S. banks. But there's a sense of safety that spiked market prices higher today.
Here's a chart of the S&P 500 ETF Trust (NYSE: SPY) …
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