The hottest Deposits Substack posts right now

Money moved from smaller banks into larger banks during bank runs.
Switching banks or investing in money market funds doesn't reduce total deposits.
Deposit erosion likely occurred from commercial sectors not getting new credit with tightening monetary policies.

Bitcoin can be a hedge against inflation over multi-year periods.
Banks have managed to stabilize deposits and control perception amidst challenges.
For banks, maintaining public perception of safety is crucial to weather turbulent times.

The demise of Silicon Valley Bank was caused by a collapse due to interest rate risk management and significant deposit outflows.
Silicon Valley Bank's strategy of investing in securities was affected when rising interest rates led to significant unrealized losses, making the bank technically insolvent.
The bank faced challenges in managing deposit outflows and was unable to satisfy demands due to a concentrated customer base and limited options like tapping into its securities portfolio.

The smallest bank in Tennessee saw significant growth by leveraging BaaS partnerships, but this rapid expansion may raise concerns about the bank's ability to manage increased complexity.
The Herrington family behind Lineage Bank has a history of running banks, facing challenges and controversies in their previous ventures.
Synapse, a key BaaS partner of Lineage Bank, has faced regulatory scrutiny and may be pressuring Lineage to approve more programs, highlighting risks in complex financial partnerships.

Both cash liquidity and solvency are crucial for banks. If customers or investors worry about either, they may withdraw funds or sell stock.
Bank liquidity has been fluctuating, impacted by events like the pandemic and quantitative easing/tightening, leading to concerns about insolvency and the need for temporary borrowings.
Deposit fluctuations in banks are tied to the Federal Reserve's actions like quantitative easing and tightening, with large banks experiencing the fastest decline in deposits.

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First Republic is facing a financial crisis and potential FDIC takeover due to significant uninsured deposit withdrawals.
The bank's investments in long-duration assets like real estate loans have suffered as interest rates rose.
The broader US banking system remains stressed with decreasing deposits and increased borrowing, impacted by the inverted yield curve and changing depositor dynamics.

Regional banks are facing a crisis due to loans made on real estate that is decreasing in value.
Commercial real estate debt poses a major risk as vacancy rates rise and property values fall.
Government-backed long-dated debt has become unmarketable, impacting regional banks and creating a two-tier banking system.

The American banking system is facing increased risks with several banks failing and many regional banks under pressure
Market movements for surviving banks show negative excess returns, with declining valuations particularly for mid-sized regional banks
Understanding rates risk in the banking system requires looking at exposure to long-term assets, especially in real estate lending, and the impact on uninsured deposits

Silicon Valley Bank grew rapidly and reached the 16th largest bank in the US, but struggled with managing its growth.
Banks make money by taking deposits and making loans, operating with fractional reserves and managing a balance between liquidity and lending.
SVB's downfall was fueled by a combination of poor decisions, rising interest rates, and a concentrated deposit base that led to a rapid collapse.

Silicon Valley Bank faced a major bank failure, leading to significant implications in the banking sector.
Depositors should be prioritized in bank resolutions to maintain stability and prevent mass panic.
Bank runs can have widespread consequences, requiring regulators to ensure depositor confidence and prevent systemic failures.