The unprecedented events of the last two weeks in the banking industry have been breathtaking. As the banking and capital markets turn their focus to the Federal Reserve and Washington, the crisis of confidence that has ping-ponged between California, New York and Switzerland has caused many clients and investors to change their relationships in the banking world.
Let’s review in a nutshell what has happened:
First, two American banks – Silicon Valley Bank (“SVB”) and Signature Bank of New York – ran out of cash. The FDIC swooped in within 48 hours to protect all depositors. Most of SVB was acquired by First Citizens Bank which greatly expanded its presence in California. Most of Signature Bank of New York was acquired by the Flagstar Bank subsidiary of New York Community Bancorp.
