The article Ripple CEO Assures Investors: Despite SVB Exposure, We’re Financially Solid appeared first on Coinpedia Fintech News.
Brad Garling house, the CEO of Ripple, responded to inquiries on Twitter over the company’s connection to the recently closed Silicon Valley Bank (SVB). Investors should rest confident knowing that Ripple, which maintained a portion of its cash balance with SVB, does not foresee any business disruptions and has already broadened its network of bank partners to lessen the effects of the closure. He continued by saying that despite the recent occurrences, Ripple’s finances are still solid.
Garlinghouse Exposes Financial System’s Brokenness
Garlinghouse pointed out the absurdity of the existing financial system in a different tweet as some businesses struggle to pay employees in the wake of Silicon Valley Bank’s demise. He emphasised the fact that wires are still not always operational, rumours can cause panic and collapse, and the fragmented system makes it difficult for money to flow around. Garlinghouse’s remarks are an accurate reflection of the larger systemic problems that lead to financial instability and the requirement for modernization.
Shutdown of SVB Shocks Tech Sector
The biggest bank collapse since the 2008 financial crisis, Silicon Valley Bank was recently shut down by regulators, sending shockwaves across the IT sector. As the bank announced it would need to raise up to $1.75 billion in capital to strengthen its books, customers rushed to withdraw their money, which led to the bank’s demise. According to Bloomberg News, the FDIC did not insure more than 93% of the $161 billion placed at Silicon Valley Bank.
FDIC Acts in an Unusual Way
A National Bank of Santa Clara was established by the Federal Deposit Insurance Corporation (FDIC) to hold the deposits and other assets of the defunct Silicon Valley Bank. Industry experts were taken aback by this decision because the FDIC usually announces bank closures on Fridays after the stock market closes to minimise client harm. Certain corporations and individuals with millions of dollars deposited at Silicon Valley Bank may receive little to no reimbursement, even though customers of FDIC-regulated banks are covered up to $250,000 per account.