The rate on the BTFP 1-yr collateralized loans (for PAR value, NOT current value) is "1-yr overnight swap rate + 10 bps". The sweetener is not the rate, but that banks can get PAR value for their underwater securities, but after 1 year, those underwater securities go back to banks' balance sheets.
While no buyer has emerged yet for the US SVB Bank, there is news this morning that HSBC bought the UK SVB Bank for a song. News is pending for its other branches in 13 countries.
A dramatic reversal in the US futures from rally last evening to selloff this morning. Things may not be as rosy as they appeared first.
BTFP Term Sheet https://www.federalreserve.gov/newsevents/pressreleases/files/monetary20230312a1.pdf
Swap Rates https://www.chathamfinancial.com/technology/us-market-rates

@Observant1 hit the nail on the head - moral hazard. If the Treasury implicitly backs up every bank that botches things so badly that they create "systemic risk", then not only do we have the "normal" moral hazard created by insurance (indifference to risk) but aggravated moral hazard. One gets coverage only if one takes outsized risks with tons of money. (In essence, the TBTF problem.)
FDIC insurance is more than adequate for retail investors; they should not be standing in line to pull their money out - though many people still do that. Startups should not need fast access to all their cash. They need to meet payroll and other operating expenses. But they don't need fast access to all their cash from an investing round or a loan.
If they really do need tons of cash at a moment's notice, let them pay the banks for the service. Banks can shovel the cash into their vaults or do whatever the electronic equivalent is without putting a dime at risk.
I have sympathy for the employees of companies that tied up their money in SVB, but little for the companies themselves. Small depositors cannot be expected to investigate the soundness of their banks, so their deposits are insured. Businesses are different, and this gets us back to moral hazard.

@hank With a lot of threads today, tis like reading a short book here.
I'll add this back from a previous post regarding the 2008 TARP program.
Note: these 'loans' did carry interest and was expected to be repaid to the Treasury. The Treasury did have a profit when all was settled and done from the various loans.
The Troubled Asset Relief Program (TARP) was instituted by the U.S. Treasury following the 2008 financial crisis. TARP stabilized the financial system by having the government buy mortgage-backed securities and bank stocks. From 2008 to 2010, TARP invested $426.4 billion in firms and recouped $441.7 billion in return.
---Perhaps the Treasury will have some profit for the efforts. :) I don't know the terms of the 'bail' monies.
Flashback: During the GFC, Bloomberg and CNBC became all-nighters. No info-mercials, etc. 24 hours of everything! SO, if what started Friday could have become systemic; then the actions taken were intended to deliver a full punch here and now. One can only imagine the meetings, phone calls and data crunching of banking records/data. Although, I watched Ms. Yellen this morning state that there would not be a bailout.
NOW, how about a full audit (any organization that is involved with the any form of banking in this country, plain and clear text without any of the cockeyed and perverted auditing standards that have taken place over the years) available to the public every month, online for free.
Overview: Still better than China, and that we have a 'form' of 'rule of law', as perverted as it may be.
Good evening.

Before Market open at 9:30 EDT on Monday, 13 March, 2023. Here is an extremely random list of how some banks fared at the Closing Bell, this past Friday: (And we shall see just what happens on Monday!)
CCBG. Tallahassee: +0.12%
BHB. Bar Harbor, Maine: -1.78%
OCFC, N.J. -3.64%. (The Big Loser on THIS list.)
CAC. Camden, Maine: -1.47% and a 52-week new low.
CATC. Cambridge, MA. -2.02%
SSB. Winter Haven: new 52 week low, but CNBC.com reports a bounce-back: +1.26%
SMMF Eastern WV panhandle, Shenandoah Valley in VA. Also just took over and merged with Prov. State Bank in the Eastern Shore of MD: -1.46%.
UNB. Morrisville, VT: -3.42%
BMO (owns the old Harris Bank out of Chicago in the USA:) -2.64%
CM (owns PrivateBancorp in the USA:) -1.9%.

@davidrmoran

Why did you jump subjects? Local news never did longform journalism of the sort we're discussing, at least not small papers, even in their postwar heyday (to the 1990s or a bit before). Newsday maybe, if we call that 'local'.

That's a fair remark. I suppose I was talking about the declining quality of print journalism more broadly, and local news was a vital part of that.

I didn't realize that such an option existed. But I'll tell you straight out: I wouldn't trust ANY private operation in the long run. That's just transferring the risk of loss from a poorly managed bank to a possibly poorly managed private concern. So they get in trouble: then what? I believe that such an operation needs to be an integral part of the overall government financial system.
Isn't that exactly what the FDIC & the government are doing right now with SVB?
U.S. says all deposits at failed Silicon Valley Bank will be available Monday

March 12 (Reuters) - State regulators closed New York-based Signature Bank (SBNY.O) on Sunday, the third largest failure in U.S. banking history, two days after authorities shuttered Silicon Valley Bank (SIVB.O) in a collapse that stranded billions in deposits.
The Federal Deposit Insurance Corporation (FDIC) took control of Signature, which had $110.36 billion in assets and $88.59 in deposits at the end of last year, according to New York state's Department of Financial Services.
All of the depositors of Signature Bank and Silicon Valley Bank will be made whole, and "no losses will be borne by the taxpayer," the U.S. Treasury Department and other bank regulators said in a joint statement.

Check this out .
DEPARTMENT OF THE TREASURY
EXCHANGE STABILIZATION FUND
Management’s Discussion and Analysis (Unaudited)
Fiscal Year 2021
8
(Continued)
reestimates (see Note 11). Amounts due to the General Fund also decreased by $9.6 billion, reflecting a
decrease in the downward subsidy accrual compared to FY 2020.
Net Position
The Net Position of $42.2 billion at September 30, 2021 represents the combined total of the ESF’s
unexpended appropriations and cumulative results of operations. The $479.3 billion (or 91.9%) decrease
in FY 2021 was driven by the $478.8 billion rescission of CARES Act appropriated funds.
2022 report should be coming out soon, March .
Seems to me to be a bit under funded

https://www.cnbc.com/2023/03/12/regulators-close-new-yorks-signature-bank-citing-systemic-risk.html
and now signature bank. "Crypto-focused." When will the idiots in charge of everything finally wake up and PROHIBIT crypto??? Shit.

First Genesis (lender), then Silvergate, now Signature..... fun times in cryptoland!

A pox on them.

https://www.cnbc.com/2023/03/12/regulators-close-new-yorks-signature-bank-citing-systemic-risk.html
and now signature bank. "Crypto-focused." When will the idiots in charge of everything finally wake up and PROHIBIT crypto??? Shit.

First Genesis (lender), then Silvergate, now Signature..... fun times in cryptoland!

https://www.cnbc.com/2023/03/12/regulators-close-new-yorks-signature-bank-citing-systemic-risk.html
and now signature bank. "Crypto-focused." When will the idiots in charge of everything finally wake up and PROHIBIT crypto??? Shit.

Additional "backing" comes from the Exchange Stabilization Fund (ESF) that has been used in past crisis and/or dollar-interventions.
One interesting aspect of the new BTFP facility seems that banks can use securities as collateral and get advances for 1 year at their par value (not current value). Rate will be 1-yr overnight swap rate + 10 bps. That sounds like a great deal!

Where does the government get all this money to cover depositors not covered by FDIC insurance?
PS - There’s one in every crowd.

A special assessment on banks will be implemented (as required by law) to cover Deposit Insurance Fund losses attributed to uninsured depositors.

Makes my blood boil.

Yes, not much info re Silvergate. Did find this, though:
How Silvergate’s Crypto Collapse Differed From Silicon Valley Bank’s: No Bailout
and this:
Silvergate Capital Corporation announced the immediate winding down of the bank’s operations along with voluntary liquidation of the bank.

You think maybe Wells Fargo laid off the guys who just said to "buy Signature Bank, New York", which was closed today by its state chartering authority?
Nah, probably not.

"We stand by our analysts, because they're here precisely to make an OPINION, you know. And nobody will eeeeeveeeer be 100% correct in their research reports and/or market recommendations. But don't worry, we'll have more insights and analysis for you to consider tomorrow!"

"We are also announcing a similar systemic risk exception for Signature Bank, New York, New York, which was closed today by its state chartering authority. All depositors of this institution will be made whole. As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer," Treasury, Federal Reserve, and FDIC said in a joined statement.
I don't know anything about SBNY other than it's troubles started a year ago. It's stock is down 77% in the last year
As of Dec. 31, Signature had $110.4 billion in total assets and $88.6 billion in total deposits, according to a securities filing

Saw somewhere -
Interesting FDIC has 125billions. On the hook 25billions now .

https://www.federalreserve.gov/newsevents/pressreleases/monetary20230312b.htm
https://www.federalreserve.gov/newsevents/pressreleases/monetary20230312a.htm
Notes to follow.
Signature Bank, NY also closed.
ALL depositors of Signature AND SVB Bank will be protected - insured & uninsured.
Stock and debt holders will not be protected.
New BTFP facility for 1-yr collateralized loans with $25 billion funding coming from Exchange Stabilization Fund.
Fed Discount Window access to be easier.

What I find odd is that KRE, the regional bank ETF simply didn't move lower on Thursday and Friday. They were leaking oil beginning Monday, down over 16% for the week. Someone knew what was happening before the press and the public became aware.

KRE fell -8.11% on Thursday, -4.39% on Friday.
https://stockcharts.com/h-sc/ui?s=KRE&p=D&b=5&g=0&id=p16451725406

https://bloomberg.com/news/articles/2023-03-12/fed-and-treasury-weigh-emergency-authority-for-deposit-backstop?srnd=premium
It's one thing for the Fed to want ordinary Americans to lose their jobs by raising rates. But it's another if banks and their biggest wealthiest customers who have more than the FDIC limits in accounts are in trouble.

The Federal Reserve and the Treasury Department are preparing emergency measures to shore up banks and ensure they can meet potential demands by their customers to withdraw money, as the US seeks to stave off a deeper crisis after SVB Financial Group’s failure.
The Fed is planning to ease the terms of banks’ access to its discount window, giving firms a way to turn assets that have lost value into cash without the kind of losses that toppled SVB’s Silicon Valley Bank. The Fed and Treasury are also preparing a program to backstop deposits using the Fed’s emergency lending authority.
The changes under discussion were described by people with knowledge of the matter, who asked not to be named because the talks are confidential. Representatives for the Fed and Treasury had no comment.
Regulators are discussing extraordinary measures as banks face the prospect of booking losses if customers pull uninsured deposits after the swift collapse of SVB rattled financial markets last week and left its clients in the lurch. A flood of withdrawals can force banks to sell assets such as bonds that have deteriorated in value amid interest-rate increases — the dynamic behind SVB’s demise.