Silicon Valley Bank crash: Anupam Mittal expects ‘doomsday predictions’ to fail. Here's why
US treasury secretary Janet Yellen has ruled out any bailout from the federal government for the ill-fated, sixteenth-largest lender in the United States.
Sharing his opinion on the Silicon Valley Bank (SVB) situation, Shaadi.com founder Anupam Mittal said the US government will ensure no ‘doomsday prediction’ plays out, as the issue has ‘serious political ramifications’ due to next year's presidential election.
“Lots of extreme doomsday predictions following the #SVBRun but doubt any will play out. The issue has serious political ramifications right before an election year and so US govt will ensure there is no contagion,” Mittal wrote in a LinkedIn post.
“Also the cost of securing #SVB clients is relatively low, given asset base … it’s more of a liquidity issue driven by a run on the bank. Unfortunately equity and bond holders of the bank are toast. What do you think?” he asked his followers.
Responding to the Shaadi.com founder, a user, Ashish Rajkhowa, agreed with the assertion; he, however, also said SVB's collapse raises a more fundamental question, on big banks' analyst research, which, he said, impacts decisions of equity and bond holders.
Another user, Gajjanan Ratnakarrao Trikutkar, hoped the Silicon Valley Bank crisis would not turn out to be the next Lehman Brothers episode.
What has the US government said?
On Sunday, Janet Yellen, the treasury secretary in President Joe Biden's administration, ruled out any bailout from the federal government for the ill-fated, sixteenth-largest lender in the United States.
“We're not going to do that. But we are concerned about depositors, and we’re focused on trying to meet their needs,” Yellen told CBS in an interview.
Separately, President Biden, too, spoke with Gavin Newsom, the governor of California, where SVB is headquartered in the city of Santa Clara. According to a White House statement, he discussed with Newcom the failure of the bank, as well as the efforts being undertaken to address the situation.