Banking Crisis: Another bank in America on the verge of collapse, bankers’ weekend spoiled again
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Saturday and Sunday are holidays in most of the offices. That’s why the employees working in the offices get into the mood of weekend fun from Friday itself. In many offices, weekend parties are also organized on Fridays. But bankers are scared of it. The reason for this is that most of the banks have sunk on Friday itself. This has ruined the weekend not only for bankers but also for banking regulators, lawyers and journalists. Regulators are tasked with scrutinizing bank accounts, lawyers are tasked with preparing the necessary documents, and journalists are tasked with keeping an eye on every development.
dread from friday
Recently two banks in America were drowned overnight and Europe’s giant bank Credit Suisse was also on the verge of drowning. Due to this, the world is once again living in fear of deepening banking crisis. The funny thing is that most of the banks have sunk on Friday itself. For example, on March 14, 2008, there was a cash crisis on Bear Stearns. It was a Friday. Similarly, Friday was the last trading day before Lehman Brothers declared itself bankrupt. It is a matter of September 12, 2008. Washington Mutual was taken over by regulators on September 26, 2008, the biggest bank collapse in US history. Coincidentally, that day was also Friday.
Recently, on March 10, the Silicon Valley Bank of America was taken over by the regulators. That day was also Friday. It is the second largest bank collapse in US history. Similarly, $10 billion was withdrawn from Signature Bank on March 10 itself. That day was Friday. Two days later, the US regulators took it into their possession. UBS bid on March 17, 2023 to save Credit Suisse from sinking. That day was also Friday.
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why weekend
When a bank is in bad shape, regulators don’t want to do anything that could create panic among customers. That’s why they calmly plan a takeover and do it over the weekend. The FDIC has the responsibility of taking over the sinking banks in America. Earlier, most of the banks were closed on weekends. This would have given the FDIC 60 hours to do its job. Then a team of 45 to 60 people used to enter with printers, computers, copiers. But now smaller teams are on site. Most people work from home or office.
These teams stay awake all night sifting through the accounts of the bankrupt banks to find out which assets can be sold. The purpose behind this exercise is that everything should be rectified before the market opens on Monday. Usually, before the market opens on Monday, the new owner of the bank comes to the fore. As we saw in the case of Credit Suisse. The Swiss government was trying to get everything right before the market opened on Monday. Eventually his efforts paid off and Credit Suisse was sold to rival UBS.
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