What happened to SVB?
Very simply: an old-fashioned bank run. The bank had some losses on its books from bonds that were not performing over the last year of rate hikes, but it was not insolvent or in immediate trouble. The viral speed at which the tech industry told clients to pull assets from the bank, all inside 48 hours, left the bank with no time to raise capital by selling assets to facilitate withdrawals. The FDIC was forced to take control of the bank to facilitate a controlled dissolution.
Are my bank accounts safe? What should I do?
$250,000 of your money at a bank is FDIC insured. You are only at risk if you hold more with a single bank. If you hold more than $250,000 at a bank right now this needs your immediate attention to bring it down to the federally insured level.
Most people use their bank account to facilitate their day-to-day finances: deposit paychecks, pay bills and credit cards and so on. For excess cash over the $250,000 mark, consider placing it with Audent and the protections of the short-term investments we would place you in. Our Enhanced Cash strategy1 is currently paying strong returns with limited risk2 by investing in short-term US Treasuries. In addition to the protective bubble of Pershing's custodial services, the investments themselves are fully backed by the US government. You have multiple layers of protection for your money, and we can make your money available to you in 24-48 hours3 when you need it.
The Silicon Valley Bank situation has caused tremendous pain in our California community and banking as a whole. But with prudent cash management no Audent client needs to suffer any direct impact from a bank solvency issue. The team is here to help you and answer any questions you might have. Please call us or schedule time here to discuss if you would like to address your cash management situation.
Sincerely,
Paul and the Audent team
