Headline

Four Days That Shook The US Banking System

Published

2 years ago

March 13, 2023

The United States banking system has been gripped in recent days by a series of convulsions that has seen the collapse of three banks and authorities undertaking extraordinary measures to reassure depositors.

It all began Wednesday night with a liquidation announcement from the small regional Silvergate Bank, a favourite among the cryptocurrency crowd.

The California business was swept up in several crypto mishaps, particularly the implosion of exchange platform FTX, before facing a wave of sudden withdrawals.

Later that same night, medium-sized institution Silicon Valley Bank announced it was facing a huge run of unexpected withdrawals.

SVB, a key lender to start-ups across the United States since the 1980s and the country’s 16th-largest bank by assets, had been hit by the tech sector slowdown as cash-hungry companies rushed to get their hands on their money.

SVB — along with other banks — was also dealing with the effects of the Federal Reserve’s policy U-turn as the US central bank has moved aggressively over the last year to counter inflation by hiking interest rates.

Banks typically borrow money under short-term instruments while loaning using long-term vehicles.

Ordinarily, this dynamic is beneficial because interest rates on long-term instruments are higher than those on short-term bonds.

But because of the volatility unleashed by the Fed’s policy pivot, there has been an “inversion” of the bond yield curve.

– Run on deposits –

The extent of SVB’s trouble emerged in a presentation last Wednesday.

While the bank emphasized the strength of its balance sheet and the relatively low proportion of its loans compared to its deposits, it also announced a capital increase of $2.25 billion and revealed that after an emergency sale of a portfolio of financial securities worth $21 billion it still came out with a loss of $1.8 billion.

The announcement spooked investors and clients, and sparked a run on deposits.

On Thursday alone, the SVB saw an estimated $42 billion of withdrawal orders.

It was not able to honour all those requests, and posted a negative cash position of nearly $1 billion by the end of the day.

On the stock market, the SVB tanked by 60 per cent.

Trading was halted on Friday before the Federal Deposit Insurance Corporation (FDIC) took over the bank and said it would protect insured deposits — those up to $250,000 per client.

But the FDIC’s guarantee only covered about four percent of the bank’s deposits, with most accounts well over that limit and clients left uncertain as to whether they would be able to recover their money in full.

The biggest US banks are considered stable, in part because of strict requirements enacted after the 2008 financial crisis.

But other mid-sized and regional institutions have been pressured by worries of a similar run on deposits to that suffered by SVB.

Shares in the New York Signature Bank, California PacWest and the Arizona-based Western Alliance all dropped 20 percent on the day.

– Averting panic –

With SVB’s future, and billions in deposits up in the air, officials from the Fed, the FDIC and the Treasury raced to craft a solution, hoping to avert a potential financial panic before financial markets opened in Asia.

To stop one bank’s failure from spreading into a systemic banking crisis, the three federal agencies announced on Sunday that SVB depositors would have access to “all of their money” starting Monday, March 13, and that American taxpayers will not have to foot the bill.

The same statement revealed that Signature Bank, the 21st-largest in the country, was automatically closed on Sunday and that its customers would benefit from the same measures as those at Silicon Valley Bank.

In a potentially major development, the Fed announced it would make extra funding available to banks to help them meet the needs of depositors, which would include withdrawals.

On Monday, President Joe Biden praised the “immediate action” by regulators while trying to offer reassurances.

“The bottom line is this: Americans can rest assured that our banking system is safe. Your deposits are safe,” Biden said.
AFP

Headline

Militia Attack On DRC IDP Camp, Kills 10, Mostly Women, Children

Published

11 hours ago

June 27, 2025

Editor

An armed group at the centre of a long-running ethnic conflict in the Democratic Republic of Congo’s northeast attacked a camp for displaced people on Friday, killing 10, local sources told AFP.

Bordering Uganda, Ituri province has for years been the scene of pitched battles between the Lendu, a group mainly made up of settled farmers, and the Hema people, typically nomadic herders.

The fighting has led to the deaths of thousands of civilians and the mass displacement of many more.

Friday’s assault on the Djangi displaced persons camp was carried out by the self-proclaimed Cooperative for the Development of Congo (Codeco), a Lendu-aligned militia responsible for previous civilian massacres, the camp’s head told AFP.

“They were many and armed with firearms and machetes. They surprised us, they killed 10 displaced people, most of them women and children,” said Richard Likana.

An employee of the Red Cross, who asked to remain anonymous, confirmed the attack, which took place around 60 kilometres (37 miles) from Bunia.

“They were cut up with machetes while others were shot,” the humanitarian worker added.

Congolese army Colonel Ruffin Mapela, the local administrator for Djugu territory where the camp is located, gave the same toll of 10 dead and put the number of injured at 15.

According to local and humanitarian sources, Codeco was responsible for an attack on February 10 which killed 51 people in Ituri province. Most of the victims were also displaced persons.

That raid was said to be a response to a strike by the rival Hema-led Zaire militia in the same area.

Violence between the Hema and Lendu killed thousands in gold-rich Ituri from 1999-2003, which only ended after European forces intervened.

The conflict erupted again in 2017, killing thousands more.

The violence has led to more than 1.5 million people leaving their homes, according to the UN.

AFP

Headline

Israel Wants Global Action Against Iran’s Nuclear Plans

Published

11 hours ago

June 27, 2025

Editor

Israel’s foreign minister said on Friday that the world was obliged to stop Iran from developing an atomic bomb, days after Israel claimed it had “thwarted Iran’s nuclear project” in a 12-day war.

“Israel acted at the last possible moment against an imminent threat to itself, the region, and the international community,” Gideon Saar wrote on X.

“The international community must now prevent, by any effective means, the world’s most extreme regime from obtaining the most dangerous weapon.”

Israel and Iran each claimed victory in the war that ended with a ceasefire on June 24.

The conflict erupted on June 13 when Israel launched a bombing campaign, stating it aimed to stop Iran from developing a nuclear weapon—an ambition Iran has consistently denied.

Following waves of Israeli attacks on nuclear and military sites, the United States bombed three key facilities, with President Donald Trump insisting it had set Iran’s nuclear programme back by “decades”.

Israeli Prime Minister Benjamin Netanyahu, in an address to the nation after the ceasefire, announced that “we have thwarted Iran’s nuclear project”.

However, there is no consensus as to how effective the strikes were.
On Friday, Iran rejected a request by UN nuclear watchdog chief Rafael Grossi to visit the bombed facilities, saying it suggested “malign intent”.

The comments from Iran’s Foreign Minister Abbas Araghchi came after parliament approved a bill suspending cooperation with the UN watchdog.

In a post on X following the move, Saar said Iran “continues to mislead the international community and actively works to prevent effective oversight of its nuclear programme”.

Headline

We Would Have Killed Iran’s Supreme Leader If Given Opportunity – Israel

Published

15 hours ago

June 27, 2025

Editor

Defence Minister Israel Katz told media that Israel would have killed Iran’s supreme leader Ayatollah Ali Khamenei during the war between the two countries if the opportunity had presented itself.

“If he had been in our sights, we would have taken him out,” Katz told Israel’s public radio station Kan Thursday evening, adding that the military had “searched a lot”.

“Khamenei understood this, went very deep underground, broke off contact with the commanders… so in the end it wasn’t realistic,” Katz told Kan.

He told Israeli television Channel 13 Thursday that Israel would cease its assassination attempts because “there is a difference between before the ceasefire and after the ceasefire”.

Katz had said during the war that Khamenei “can no longer be allowed to exist”, just days after reports that Washington vetoed Israeli plans to assassinate him.

But on Kan, Katz advised Khamenei to remain inside a bunker.

“He should learn from the late Nasrallah, who sat for a long time deep in the bunker”, he said, referring to Lebanese militant group Hezbollah’s former leader Hassan Nasrallah, who Israel killed in a Beirut air strike in September 2024.

The movements of the supreme leader, who has not left Iran since he took power, are subject to the tightest security and secrecy.

Katz said Thursday that Israel maintained its aerial superiority over Iran and that it was ready to strike again.

“We won’t let Iran develop nuclear weapons and threaten (Israel) with long-range missiles”, he said.

In his Channel 12 interview, Katz admitted that Israel does not know the location of all of Iran’s enriched uranium, but that its air strikes had destroyed the Islamic republic’s uranium enrichment capabilities.

“The material itself was not something that was supposed to be neutralised,” he said of the enriched uranium.

The impact of Israeli and US strikes on Iran’s nuclear programme has been a subject to debate.

A leaked US intelligence assessment estimated the programme to have set Iran back a few months, while Katz and other Israeli and US public figures said the damage would take years to rebuild.

Israel and Iran each claimed victory in a 12-day war that ended with a ceasefire on June 24.

The war erupted on June 13 when Israel launched a bombing campaign that it said aimed to stop Iran from developing a nuclear weapon — an ambition Iran has consistently denied.