The bankruptcy of the Californian bank in Silicon Valley has consequences in Miami where it opened a branch at Brickell Avenue and 14th Street last year to serve technology companies taking off in South Florida.
Economist Tulio Rodríguez points out that “this bank has dedicated itself to two particular situations. It has extended credit to technology companies and served them. And it has also extended credit to certain medical companies. In the last 24 months , tech companies have suffered and you can see how their stock values have deteriorated.”
The Silicon Valley bank, founded in 1983, presented itself as the financial partner of the innovation economy. Its crisis came after the rise in interest rates, as more and more customers began to withdraw their money to pay expenses and debts, for this reason, seeing their deposits running out, the bank had recourse to investment in bonds.
Gabriela Berrospi, the financial expert of “Latino Wall Street”, explains that “what happened was that they invested in bonds when interest rates were very low. And the end of the most important bank in the technology industry has begun”.
The economist warns that in the face of this new reality “the bonds are absolutely worthless, they must continue to sell them to continue to cover the withdrawals of the customers until the moment when they have no other alternative but to close the doors because they have no more money.”
Silicon Valley bank accounts are FDIC protected, but only up to $250,000, which seems like a lot of money for an individual, but remember that many of their customers are businesses.
“The majority of people, more than 87%, have more than $250,000, they had millions of dollars,” explains the “Latino Wall Street” financial expert.
On learning that another bank, Signature Bank based in New York, had also gone bankrupt, President Joe Biden assured this morning “that all customers who had deposits in these banks can be sure that they are protected and will have access to their money starting today”. and also assured that taxpayers would not pay for these losses.
Biden blamed the administration of the banks and assured all Americans that “the banking system is safe”, with which economist Tulio Rodríguez agrees, who stressed: “I don’t feel that we are in the situation of 2008”.
Miami Mayor Francis Suarez, quoted by the bank as hosting him at the opening of its Brickell branch, said he was not commenting on the matter after we tried to interview him to find out. his reaction.