<It's >

friendly economic time for anchors. Today (14th) we will be with reporter Kwon Ae-ri. I can't stop talking about America today. Following the Silicon Valley bank bankruptcy, a similar mid-level bank was declared bankrupt yesterday.

<Reporter>

Yes, following last weekend's bankruptcy of Silicon Valley Bank, news of another bank failure broke. It is a famous bank.

Signature Bank, which has been operating in eastern New York for 24 years, is the third bank in history to go bankrupt in the United States. Silicon Valley was second.

I mentioned yesterday that there are some banks in the United States that are worried about their assets now between 130 trillion and 300 trillion won.

Like Silicon Valley, Signature was a mid-range bank within this range.

For reference, JPMorgan Chase, the largest bank in the United States, has total assets of about KRW 4,200 trillion, and Shinhan Bank has total assets of KRW 550 trillion.

Unlike Silicon Valley Bank's management failures, Signature Bank was hit by a high-risk business.

Originally, I was mainly engaged in real estate finance. It was famous for giving a lot of loans to the former President Trump family's massive real estate investments.

However, in recent years, they have started accepting deposits as virtual assets as well. With this, it has been growing rapidly for a while.

However, since the collapse of Korean coins Terra and Luna last year and the bankruptcy of US cryptocurrency giant FTX this year, losses have been high and customers have been in a precarious position as they continue to withdraw deposits.

With the bankruptcy of Silicon Valley, this massive deposit withdrawal crisis has rapidly intensified. After all, it closed yesterday.

<Anchor>

This is the situation, but yesterday our stock and exchange rate markets were stable. Why?

<Reporter>

After the morning news yesterday, there was a hastily made decision in the United States, which was still Sunday, before our chapter began.

The U.S. government has agreed to guarantee all deposits at Silicon Valley banks. After a few months, this is not the case, and you can withdraw immediately.

Many companies that were tied up in the bank and couldn't afford to pay their employees right away took a breather.

The same protections were taken for depositors at Signature Bank.

So the relief that it's still too early to say that it has spilled over into the financial crisis was reflected in our financial markets yesterday.

Since last week, there have been several well-known banks in the US that have been mentioned as risky banks similar to Silicon Valley.

Signature was one of them, which remained silent and broke down after two days.

But the other places that have been mentioned are banks with long names like First Republic Bank and Western Alliance Bank.

These places were announced right away. He said he had a good distribution of assets and enough money to return his clients' deposits.

In other words, there are mid-range banks that look similar, but there is a divide between those that are prepared and those that are not.

Not all of the anxiety has been resolved yet, but the full protection of deposits has put out the fire in a hurry right away, and we can wait and see if the fire spreads any further.

<Anchor>
I think
this mood obviously had an impact, but I think the expectation that the U.S. is going to keep raising interest rates and that this is going to put some brakes on it has also played a role.

<Reporter>

Yes, this is big. The impact of successive bank failures is limited and interest rates won't be raised.

The United States will raise interest rates sharply next Thursday on our time, and South Korea cannot help but follow suit to some extent. This was almost a fait accompli.

However, in the current climate, when it is clear that failed banks have gone bankrupt one after another because they failed to respond properly to the rapidly advancing high-interest rate environment, expectations have grown as to whether the Fed will be able to raise interest rates as significantly as it had actually predicted.

However, the U.S. government has decided to protect only deposits.

President Biden reiterated last night that he would not bail out bankrupt banks or their executives.

Investors who have bought shares of these companies that have bottomed out can't help it.

Therefore, it is difficult to save investments from companies such as the National Pension Service and the Korea Investment Corporation, which held tens of billions of won worth of shares in Silicon Valley and Signature Bank as of the end of last year.

One by one, the CEO of a Silicon Valley bank sold his share of stock just two weeks ago and bought it back at a price similar to the current price that crashed, and that he was handing out thousands to hundreds of millions of dollars in bonuses to employees a few hours before the bankruptcy.

The United States has made it clear so far that it will not bail out banks even if there are more bank failures in the future.