NEW YORK — The U.S. government took extraordinary steps Sunday to stop a potential banking crisis after the historic failure of Silicon Valley Bank, assuring all depositors at the failed institution that they could access all their money quickly, even as another major bank was shut down.
The announcement came amid fears that the factors that caused the Santa Clara, Calif.--based bank to fail could spread. Regulators had worked all weekend to try to find a buyer for the bank, which was the second-largest bank failure in history. Those efforts appeared to have failed Sunday.
In a sign of how fast the financial bleeding was occurring, regulators announced that New York-based Signature Bank had also failed and was being seized on Sunday. At more than $110 billion in assets, Signature Bank is the third-largest bank failure in U.S. history.
The near-financial crisis that U.S. regulators had to intervene to prevent left Asian markets jittery as trading began today. Japan’s benchmark Nikkei 225 slipped about 1.2 percent in morning trading. Australia’s S&P/ASX 200 shed 0.6 percent to 7,104.30. South Korea’s Kospi, though, was little changed.
In an effort to shore up confidence in the banking system, the Treasury Department, Federal Reserve and FDIC said Sunday that all Silicon Valley Bank clients would be protected and able to access their money. They also announced steps that are intended to protect the bank’s customers and prevent additional bank runs.
“This step will ensure that the U.S. banking system continues to perform its vital roles of protecting deposits and providing access to credit to households and businesses in a manner that promotes strong and sustainable economic growth,” the agencies said in a joint statement.
Under the plan, depositors at Silicon Valley Bank and Signature Bank, including those whose holdings exceed the $250,000 insurance limit, will be able to access their money today.
In a separate move, the Federal Reserve late Sunday announced an expansive emergency lending program that’s intended to prevent a wave of bank runs that would threaten the stability of the banking system and the economy as a whole.
Fed officials characterized the program as akin to what central banks have done for many decades: Lend freely to the banking system so that customers would be confident that they could access their accounts whenever needed.
The lending facility will allow banks that need to raise cash to pay depositors to borrow that money from the Fed, rather than having to sell Treasuries and other securities to raise the money. Silicon Valley Bank had been forced to dump some of its Treasuries at at a loss to fund its customers’ withdrawals. Under the Fed’s new program, banks can post those securities as collateral and borrow from the emergency facility.
The Treasury has set aside $25 billion to offset any losses incurred under the Fed’s emergency lending facility. Fed officials said, however, that they do not expect to have to use any of that money, given that the securities posted as collateral have a very low risk of default.
Analysts said the Fed’s program should be enough to calm financial markets today.
“Monday will surely be a stressful day for many in the regional banking sector, but today’s action dramatically reduces the risk of further contagion,” economists at Jefferies, an investment bank, said in a research note.
Though Sunday’s steps marked the most extensive government intervention in the banking system since the 2008 financial crisis, its actions are relatively limited compared with what was done 15 years ago. The two failed banks themselves have not been rescued, and taxpayer money has not been provided to the banks.
President Joe Biden said Sunday evening as he boarded Air Force One back to Washington that he would speak about the bank situation today. In a statement, Biden also said he was “firmly committed to holding those responsible for this mess fully accountable and to continuing our efforts to strengthen oversight and regulation of larger banks so that we are not in this position again.”
Regulators had to rush to close Silicon Valley Bank, a financial institution with more than $200 billion in assets, on Friday when it experienced a traditional run on the bank where depositors rushed to withdraw their funds all at once. It is the second-largest bank failure in U.S. history, behind only the 2008 failure of Washington Mutual.
Some prominent Silicon Valley executives feared that if Washington didn’t rescue the failed bank, customers would make runs on other financial institutions in the coming days. Stock prices plunged over the last few days at other banks that cater to technology companies, including First Republic Bank and PacWest Bank.
Among the bank’s customers are a range of companies from California’s wine industry, where many wineries rely on Silicon Valley Bank for loans, and technology startups devoted to combating climate change. Sunrun, which sells and leases solar energy systems, had less than $80 million of cash deposits with Silicon Valley. Stitchfix, the popular clothing retail website, disclosed in a recent quarterly report that it had a credit line of up to $100 million with Silicon Valley Bank and other lenders.
Tiffany Dufu, founder and CEO of The Cru, a New York-based career coaching platform and community for women, posted a video Sunday on LinkedIn from an airport bathroom, saying the bank crisis was testing her resiliency. Given that her money was tied up at Silicon Valley Bank, she had to pay her employees out of her personal bank account. With two teenagers to support who will be heading to college, she said she was relieved to hear that the government’s intent is to make depositors whole.
“Small businesses and early-stage startups don’t have a lot of access to leverage in a situation like this, and we’re often in a very vulnerable position, particularly when we have to fight so hard to get the wires into your bank account to begin with, particularly for me, as a Black female founder,” Dufu told The Associated Press.
Silicon Valley Bank began its slide into insolvency when its customers, largely technology companies that needed cash as they struggled to get financing, started withdrawing their deposits. The bank had to sell bonds at a loss to cover the withdrawals, leading to the largest failure of a U.S. financial institution since the height of the financial crisis.
Yellen described rising interest rates, which have been increased by the Federal Reserve to combat inflation, as the core problem for Silicon Valley Bank. Many of its assets, such as bonds or mortgage-backed securities, lost market value as rates climbed.
Sheila Bair, who was chairwoman of the FDIC chair during the 2008 financial crisis, recalled that with almost all the bank failures during that time, “we sold a failed bank to a healthy bank. And usually, the healthy acquirer would also cover the uninsured because they wanted the franchise value of those large depositors so optimally, that’s the best outcome.”
But with Silicon Valley Bank, she told NBC’s “Meet the Press,” “this was a liquidity failure, it was a bank run, so they didn’t have time to prepare to market the bank. So they’re having to do that now, and playing catch-up.”
Rugaber and Megerian reported from Washington. Sweet and Bussewitz reported from New York.
Associated Press Writers Hope Yen in Washington and Jennifer McDermott in Providence, R.I., contributed to this report.
WATSONVILLE, Calif. — Wet, miserable weather continued across huge swaths of California on Sunday as an atmospheric river that caused major flooding flowed eastward, and as a new system threatens the region with another onslaught of rain, snow and gusting winds as soon as tonight.
The National Weather Service said the next torrent could exacerbate the severe flooding that overwhelmed the area in recent days, causing a levee failure that prompted widespread evacuations Saturday in farming communities near the state’s Central Coast.
The next system is not expected to bring as much rain, but forecasters cautioned that “considerable flooding” could occur in lower elevations from additional rain and snowmelt that could swell creeks and streams.
“Definitely prepare for some more flooding impacts. The ground is very saturated. We’re already seeing some impacts from some light amounts even today,” National Weather Service forecaster Eleanor Dhuyvetter said.
The rain and snow is expected to extend from Central California to Oregon, as well as northern Nevada.
Of particular concern are the expected strong winds. The weather service is predicting wind gusts of up to 50 mph in some places — which could potentially snap tree branches and damage power lines.
But the new storm is moving fast, meaning it won’t have time to dump as much rain.
Over the past two days, more than 20 inches of snow fell at a measuring station in the Sierra Nevada, and the new system is expected to pack even more. The snowpack is now nearly twice the average — the highest amount of snowfall in about four decades, according to UC Berkeley’s Central Sierra Snow Lab.
The snowpack stores much-needed water for a state seeking to emerge from a three-year drought.
As much as a foot of rain fell in the Big Sur area of the state over a two-day period, weather data.
Authorities suggest that residents have a plan in case further evacuations orders are issued.
Across Monterey County, more than 8,500 people were evacuated Saturday, including roughly 1,700 residents — many of them Latino farmworkers — from the unincorporated community of Pajaro.
“We are still in disaster response mode,” said Monterey County spokesman Nicholas Pasculli on Sunday. He said the county is staging high water rescue teams around the county and opening more shelters in anticipation of more flooding as the new storm rolls in.
The flooding has impacted drinking water facilities in Pajaro. Officials said residents should not drink tap water for cooking or drinking until further notice.
Highway 1, also known as the Pacific Coast Highway, is closed at several points along Big Sur as well as near Pajaro due to flooding.
The atmospheric river, known as a “Pineapple Express” because it brought warm subtropical moisture across the Pacific from near Hawaii, was melting lower parts of the huge snowpack in California’s mountains.
Because of the massive flooding over the early weekend, more than 50 people had to be rescued by first responders and the California National Guard. One video showed a Guard member helping a driver out of a car trapped by water up to their waists.
The extent of property damages was still uncertain but Luis Alejo, chair of the Monterey County Board of Supervisors, sought help from the state and federal governments.
“The need will be great! Will take months for our residents to repair homes!” he wrote in a tweet Saturday.
Gov. Gavin Newsom has declared emergencies in 34 counties in recent weeks, and the Biden administration approved a presidential disaster declaration for some on Friday morning, moving to expedite more federal assistance. President Joe Biden spoke with Newsom on Saturday to pledge federal support for California’s emergency response, the White House said.
Weather-related power outages affected more than 17,000 customers in Monterey County late Saturday, according to the Governor’s Office of Emergency Services. By late Sunday morning, about 7,000 were still without electricity.
The governor’s office said it was continuing to monitor the situation in Pajaro.
The Pajaro River separates the counties of Santa Cruz and Monterey. Officials had been working along the river’s levee system in the hopes of shoring it up when it was breached around midnight Friday into Saturday. Crews began working to fix the levee around daybreak Saturday as residents slept in evacuation centers.
Built in the late 40s to provide flood protection, the levee has been a known risk for decades with periodic signs of significant trouble. In the 1990s the levee was breached several times, prompting flooding that led to evacuations and disaster declarations. Emergency repairs to a section of the berm was undertaken in January. A $400 million rebuild is slated to begin in 2025.
This week’s storm marked the state’s 10th atmospheric river of the winter, storms that have brought enormous amounts of rain and snow to the state and helped lessen drought conditions that had dragged on for three years. State reservoirs that had dipped to strikingly low levels are now well above the average for this time of year, prompting state officials to release water from dams to assist with flood control and make room for even more rain.
Dazio reported from Los Angeles. Associated Press writers Martha Mendoza in Santa Cruz, Calif., and Bobby Caina Calvan in New York contributed.
United High School’s Drama Club will present the production “Spy School” this weekend.
The year is 1961. The Space Race has begun. The United States and the Soviet Union are competing to see who will dominate the planet and the farthest reaches of the solar system. And who better to give the U.S. the edge but Jane Doe?
Jane Doe, a typical American teenager (played by Hannah Rudnik), is recruited by Agent K (Abigale Moyer) and the CIA to foil Russia’s evil plan to kidnap an American astronaut (Cade Krouse).
After intense physical workouts with a trainer (Sawyer McGinnis) and personalized special agent tools designed by Fizz (Geno Eritano), Jane is ready to head to the Anonymous American High School. Though warmly welcomed by the A.A. High School students (Rebecca Dziagwa, Sadye Barner and Reese Hoffman), Jane almost immediately draws the attention (and the ire) of her teachers (Lucia Niida and Caly Ward).
Her search for the Russian spy goes nowhere, her fake family (Jared Donelson, Zoe Mack and Jonas Mack) is more chaotic than helpful, and the prom, where the kidnapping is to occur, is just days away! Will Jane find a date to the prom? Will she thwart Russia’s plan? Will she convince her English teacher that she does know how to use a semicolon? Will Jane’s mission succeed?
Additional cast includes Christopher Brillhart, Hope Fischer, Bailey Pisarcik, Peyton Potts, Nicholai Sisitki and Jesse Sokira. Crew includes Elisabeth Ressler, stage manager; David Susick, lighting supervisor; John Michael Dunn, audio supervisor; Garin Fischer and Alex Stewart, spotlights; Noah Riffer, sound effects; Marlee Barner, Sierra Boring, Collin Brilhart, Katya Dishong, Liz Moyer, and Issac Rudnik.
Show dates and times are 7 p.m. Saturday and 2 p.m. Sunday. Both shows are in the United High School Auditorium, 10780 Route 56, Armagh. Adult tickets are $6 and student tickets are $4. Children age 4 and younger are admitted free.
For additional ticket information, call (814) 446-5615, ext. 1264. Live streaming is available for the Saturday evening show only. Use the following link for information: https://www.stellartickets.com/o/united-drama-department/events/spy-school-united-drama-club-production.
Obituaries on Page A-4
WILLIAMS, Easton J., 9, Blairsville
The Student Association of Nutrition and Dietetics at Indiana University of Pennsylvania have organized several events to celebrate National Nutrition Month in March, including a crockpot cook-off competition and a program with a nationally known speaker. This year’s theme for National Nutrition Month is “Fuel up for the Future.”
The soup crockpot cook-off, which is open to spectators, will be held March 22 from 3 to 5 p.m. at the Hadley Union Building Susquehanna Room. For a $2 donation, individuals may sample the entries and vote for a favorite.
Community members can also join the competition and present a soup. This year competitors are challenged to include a whole grain in their soup. To make an entry into the competition, email email@example.com.
All proceeds from the cook-off event will be donated to the IUP Food Pantry and Help Center, which provides food, toiletries and some clothing items to IUP students in need.
The final event for the month is a presentation by Liz Dunn, MS, RD, LDN, who will speak on “Adaptive Sports: Similarities and Differences in Sport and Nutrition” on March 29 at 7 p.m. in Jane Leonard Hall Room 126. Dunn is a research associate on spinal cord injuries for the University of Pittsburgh. She is also one of the first women to represent the USA at the Wheelchair Rugby World Championships.
Dunn, a graduate of Warren Area High School who makes her home in Pittsburgh, has competed all over the world in the sport of wheelchair rugby. She began playing wheelchair rugby with the Pittsburgh Steelwheelers club in 2013 and also played with the Texas Stampede. She was invited to join the national team in 2020.
“You will not be satisfied unless you are contributing something to or for the
benefit of others.”
Walter Annenberg, American businessman (born on this date 1908-2002)