Headline

Four Days That Shook The US Banking System

Published

3 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

Court Jails Two For Targeting President With Sorcery

Published

11 hours ago

September 15, 2025

Editor

A Zambian court on Monday sentenced two men to two years in prison with hard labour on charges of attempting to use witchcraft to kill the country’s president.

Mozambican national Jasten Mabulesse Candunde and Zambian village chief Leonard Phiri were arrested in December in possession of charms, including a live chameleon.

Police said they planned to use the charms to harm President Hakainde Hichilema, and they were charged with professing knowledge of witchcraft and possession of charms.

“The motive of the crime was to kill the head of state,” magistrate Fine Mayambu ruled in the capital Lusaka on Monday.

“The convicts were not only enemies of the head of state but all Zambians. I therefore sentence them to 24 months imprisonment with hard labour from the date of their arrest,” he said.

The prosecution said the men had been hired by the brother of opposition MP Emmanuel “Jay Jay” Banda, who is facing trial for robbery, attempted murder and escaping custody.

Headline

Two Nigerians Face Jail Terms In Liberia’s Piracy Trial

Published

11 hours ago

September 15, 2025

Editor

Criminal Court ‘D’ in Monrovia is set to deliver judgment this week in Liberia’s first piracy trial, involving two Nigerian nationals accused of hijacking a cargo vessel in the Gulf of Guinea.

According to court records, the defendants were arrested earlier this year after a Liberia-flagged ship was seized by armed men while transporting goods through international waters. The crew sent a distress signal, prompting international maritime forces to intervene.

The suspects were subsequently transferred to Liberian authorities under global maritime cooperation protocols.

According to Liberia’s news platform, Front Page Africa, the case has attracted attention because Liberia maintains one of the world’s largest open ship registries, yet prosecutions for piracy within its domestic courts have not previously occurred. Under international law, Liberia holds jurisdiction over crimes involving ships registered under its flag.

On Monday, proceedings took a new turn when defense lawyer, Cllr. Bestman Juah, informed the court that the defendants had admitted responsibility for the hijacking and were requesting a plea-bargain arrangement. State prosecutors did not oppose the request, leaving open the possibility of reduced sentences in exchange for full cooperation.

Resident Judge Mameita Jabateh-Sirleaf, who presides over Criminal Court ‘D’, will rule on whether to accept the plea deal and determine the sentencing framework. The ruling could also address deportation measures following imprisonment.

Criminal Court ‘D’ handles cases involving armed robbery, terrorism, hijacking, and other serious crimes, and the piracy trial represents a growing trend of transnational offenses being prosecuted within Liberia’s judicial system.
As of press time, the court has not announced the date for sentencing.

Headline

Spain Cancels $825m Israel Arms Deal Over Gaza

Published

11 hours ago

September 15, 2025

Editor

The Spanish government has cancelled a contract worth nearly 700 million euros ($825 million) for Israeli-designed rocket launchers.

The move comes after Prime Minister Pedro Sanchez announced last week that his government would “consolidate in law” a ban on military equipment sales or purchases with Israel over its offensive in Gaza.

The contract, awarded to a consortium of Spanish companies, involved the purchase of 12 SILAM rocket launcher systems derived from the PULS platform made by Israeli firm Elbit Systems, according to the International Institute for Strategic Studies’ Military Balance.

First reported by local media and the Israeli newspaper Haaretz, the cancellation was formalised on Spain’s official public contracts platform on September 9.

The following day, Sanchez unveiled measures aimed at stopping what his leftist government called “the genocide in Gaza”.

It includes the approval of a decree imposing a ban on military equipment sales or purchases with Israel due to its military offensive in Gaza, launched after the Hamas attacks in October 2023.

Spain applied the ban as Israel stepped up its military onslaught.

Spain has also formalized the cancellation of another contract for 168 anti-tank missile launchers, which were to be manufactured under license from an Israeli company.

That contract, valued at 287 million euros, had been first reported by the press in June.

According to Spanish daily La Vanguardia, the government is undertaking a broader review to phase out Israeli weapons and technology from its armed forces.

Sanchez has emerged as one of Europe’s most outspoken critics of Israeli Prime Minister Benjamin Netanyahu’s Gaza policy.

Relations between the two countries have been tense for months.

Israel has not had an ambassador in Spain since Madrid recognized the state of Palestine in 2024.

Last week, Spain recalled its ambassador to Israel after heated exchanges over Sánchez’s new measures.

The Barcelona-based Delas Centre, a security research institute, estimated in April that since the start of the Gaza war, Spain had awarded 46 contracts worth $1.044 billion to Israeli companies, based on public tender data.