“CNBC Special: America’s Banking Crisis” airs Sunday at 7 p.m. ET, where Jim and other experts will discuss the ramifications of Silicon Valley Bank’s demise on the economy and the stock market. Fears of contagion to banks with similar profiles to Silicon Valley Bank has brought together several government agencies to find a buyer for the troubled institution, which on Friday became the second-biggest bank collapse in U.S. history. At the very least, the Federal Deposit Insurance Corporation, the Federal Reserve, the Treasury and President Joe Biden are seeking some sort of safety net that will extend deposit insurance to all the individuals and companies with deposits at Silicon Valley. This net is incredibly important because of the $173 billion of deposits at the bank, only $4.8 billion of which are fully insured. We have plenty of time to go over why SVB became such a nightmare, but will briefly explain some of that here. What matters, however, is that if the government doesn’t come out with a plan, the stock market will have a very rough time tomorrow. What I intend to say tonight is that the risks are high but the government understands that if a full guarantee of deposits is offered, through a note provided by the Fed, this crisis is over tomorrow and it will be a remarkable opportunity to buy. Similarly, if the government can find a buyer for the bank, similar to the Washington Mutual collapse in 2008, then the crisis will also be averted. That’s because the actual loan book and deposits on hand will apparently cover any depositors’ losses. In the WAMU case, the government seized the bank, put it in receivership and then sold the assets and liabilities to another large bank, JPMorgan . A similar auction is going on right now. We might not know the results until this evening, but the government wants any auction solved Sunday so it doesn’t spill over into Monday. The government did not understand the dire nature of the situation Friday because things just…
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