Is A Banking Bailout Imminent? Or A Bank Run? What We Know So Far On SVB, Regulators As Asian Open Nears

The financial world is closely monitoring the aftermath of the collapse of SVB Financial Group's SIVB Silicon Valley Bank, Benzinga has been providing the latest updates on the biggest bank failure in over 10 years after SVB was shut down by regulators on Friday.

Yellen Says No To Bailout: On Sunday, Treasury Secretary Janet Yellen suggested in an interview that a bailout is out of the question.

“I’ve been working all weekend with our banking regulators to design appropriate policies to address this situation,” Yellen said in an interview with CBS "Face The Nation" host Margaret Brennan.

“Well, let me be clear that during the financial crisis, there were investors and owners of systemic large banks that were bailed out, and we're certainly not looking,” she said. “And the reforms that have been put in place means that we're not going to do that again.”

Auction Underway, Backstop Discussed: Meanwhile, the FDIC reportedly began an auction for Silicon Valley Bank late on Saturday night, with the final bids required by Sunday.

Even though the FDIC is aiming for a quick deal, the winner may not be known until late Sunday, according to a Bloomberg report, citing a person who requested to remain anonymous because the matter isn’t public yet. No final decision has been made, and it’s possible that an agreement may not be reached.

Additionally, CNBC reported on Sunday that financial regulators are discussing ways to navigate the fallout from the closure of Silicon Valley Bank if no buyer materializes. The options being considered include the creation of a backstop for uninsured deposits at Silicon Valley Bank, using an authority from the Federal Deposit Insurance Act, according to a source.

Also on Sunday, Bank of London confirmed the submission of the proposal and the consortium's intent to acquire Silicon Valley Bank UK.

Also Read: Ron DeSantis Blames Woke Culture For Silicon Valley Bank Collapse, Reminds Him Of Financial Crisis And Bernie Madoff 

Cuban, Scaramucci And Ackman React: Several major financial figures have been urgently warning about the potential fallout if the uninsured deposits of SVB customers are not fully guaranteed. Mark Cuban said if about 50-60% are returned across the board by Wednesday, people will have confidence the system is working, and if 10% or less are returned, people are going to question how the process is going to work.

Anthony Scaramucci, the founder of Skybridge Capital, responded to the crisis on Twitter, asking, “Who will leave deposits in a regional bank after this?” He also empathized with the small businesses, which have lost their capital access to create jobs.

Hedge fund manager Bill Ackman called for immediate action from the government. “The gov’t has about 48 hours to fix a soon-to-be-irreversible mistake,” he said on Twitter. By allowing SVB to fail without protecting all depositors, people are left to face the ugly prospect of realizing what an “unsecured illiquid claim” on a failed bank is, he added.

Now Read: U.K. Chancellor Jeremy Hunt Scrambles To Save Tech And Life Sciences Industries Following Silicon Valley Bank Failure