On Wednesday, May 3, Joseph Cioffi and Christine DeVito, with featured guests Gunes Kulaligil and Manny Malbari, Managing Directors/Co-Leaders of the Structured Finance Practice at Stout, held an in-person session, "Who’s Next? Identifying Vulnerabilities in the Banking System, Managing Risks and Maximizing Opportunities for Banks and Investors."
Does First Republic represent the beginning of the end of a banking crisis or is it merely the end of the beginning stage of banking turmoil set in motion by the run on Silicon Valley Bank (SVB)? To successfully navigate the uncertainty, below are five areas of concern and the tools to address them.
If another bank fails, there are no guarantees the FDIC will take the extraordinary steps it did to protect Silicon Valley Bank’s depositors. Understanding where danger lurks in the system and best practices to navigate cash management and legal risks will be critical as uncertainty persists.
As observed with the rescue of Silicon Valley Bank (SVB) and Signature Bank, the systemic risk exception allows the Federal Deposit Insurance Corporation (FDIC) to intervene in situations where the stability of the financial system is at risk. Although it was deployed in the 2008 financial crisis and more recently in the latest banking turmoil, there is no guarantee it will be applied again, if...
Should additional FDIC-regulated banks fail, there is no guaranty the FDIC will adopt the same measures it adopted with SVB and Signature Bank (Signature), which entered receivership on March 12, 2023, just days after the commencement of SVB’s receivership. As evidenced by recent actions taken to save (at least for the time being) First Republic Bank and Credit Suisse, the banking system remains...
Joseph Cioffi was quoted in a Banking Dive article, "Regulators Backstop SVB Deposits, Launch Emergency Lending Facility."
Joseph Cioffi was quoted in a Law.com's Corporate Counsel article, "SVB's Failure May Constrict Flow of Capital to Some Startups."