Banking Crisis, Are Your Deposits Safe?

a topic that is rarely discussed by third eyes but today we specifically raise this economic topic because of its impact on the world including the Indonesian economy recently It was widely reported that the 16th largest bank in the United States collapsed on Friday 10 March 2023 US time due to a capital crisis which caused the second biggest failure of a financial institution in US history. 

Silicon SVB bankruptcy was allegedly caused by the large number of withdrawals made by startup companies to maintain liquidity Apart from that, the impact of the Covid 19 pandemic that hit 3 years earlier and the heating up of geopolitics between Russia and Ukraine as a cause of rising prices for goods and services, 

rising prices for goods and services due to a lack of supply both locally and abroad resulted in inflation to overcome inflation in each country. having these policies in the form of raising interest rates with the aim of reducing the amount of money circulating in society setting high interest rates can discourage people from borrowing or spending money excessively In addition, it can reduce demand for goods and services so that producers tend to lower prices as information svb is a bank that specifically provides services for technology companies. 

This startup bank has an office in the center of Santa Clara, California, United States of America, founded around 1980, which at the beginning had a real estate financing business because the property business experienced a downturn in 1992. SVD switched to financing in the startup company sector in 1992. 2000 until the collapse, according to several sources, the main cause of the svb collapse was the policy of the United States central bank, the Federal Resort, which had raised interest rates from a record low since 2022 in an effort to suppress inflation. 

This caused investors to worry about taking risks due to high interest rates and making Investors in technology startup companies as SVB's main clients chose to leave in an effort to avoid the risk of SVB silicon, which is now being widely discussed after collapsing or going bankrupt within 48 hours and closing its operations by the United States authorities on March 10, 2023, then called silicon bankruptcy has great potential to have an impact on the ecosystem of startup companies. 

Global technology startups were triggered by several parties, namely giant investment banks and government agencies at the end of February. SVB officials were known to come to Golman to ask for guidance to solve complicated problems that arose due to an increase in interest rates on devent while valuet became The second largest bank bankruptcy event in the United States since the collapse of the Washington Mutual bank during the 2008 financial crisis, in general, the causes of Silicon Valley bankruptcy are related to the following three things, namely the policy of the fans of the United States Central Bank in raising interest rates, the aggressive history of the capital crisis experienced by silicon, valuebing and actions Bang Run or massive withdrawals of funds from customers triggering the collapse to increase interest rates aggressively to tackle the inflation rate as additional information during the pandemic The Fate had implemented a 0% interest rate policy. 

technology companies, many technology companies ended up saving money in svb. This action increased the value of deposits or deposits at SPB because they had abundant deposits like other banks. SVD ended up investing heavily, especially in long-term bonds, but investing in long-term bonds it also contributed to the bankruptcy of silicon Valley bank in the past year as inflation increased the fade eventually raised interest rates gradually to cope with the inflation rate the increase in interest rates eroded the price or value of svb bonds and also other banks at the same time when interest rates rose and making spending activities fall, many venture capitalists have begun to stop providing funding to technology companies due to tight funds. 

Technology companies are flocking to withdraw deposits stored in svb to pay operational costs to meet those needs svb ideally should have cash, but because it has been used for investing in long-term bonds svb didn't have enough cash finally they started selling bonds they owned worth 21.2 billion US dollars or the equivalent of 312.6 Trillion Rupiah to overcome the capital crisis the sale of the bonds resulted in a loss after tax of 1.8 billion dollars US or approximately 27.7 trillion Rupiah to offset the loss, SVD plans to sell new shares worth US$2.25 billion or around 34.7 trillion on March 8. SVD announced it was selling shares worth US$ 1.75 billion, around US$27 trillion a day. 

next on March 9 svb reassured customers that their money was still safe after selling bonds and stocks to raise capital the announcement from svb caused panic and triggered a bank phenomenon condition where customers withdrew their money from the bank In this case svb in large quantities and fast withdrawals of funds The massive build-up of customers happened within 48 hours. After the capital increase action was announced by svv on March 8, 2023, venture capital firm Fears became the first to withdraw a multi-million dollar portfolio from svb. 

Then more venture capitalists or investors followed suit. Days after the announcement, the bank, with total assets worth around 219 billion US dollars, finally collapsed. Similar things have happened in the United States in the past, namely the savings and loan crisis in the 1980s and 1990s. In the 1970s, bank interest rates American banks were relatively low which resulted in the real estate bubble, namely house prices continued to increase to suppress rising house prices. 

is a series of bank bankruptcies in 15 years not like now with a large scale at the same time so from this historical experience we can actually see one thing that is very scary, namely federa resoft as if they just want to reduce prices don't care about bank bankruptcy the bankruptcy of several banks seems to be a thing which is normal for then Just imagine around 3000 bankrupts The Fate still doesn't care so people are very worried that feat will do the same thing this time meaning bankrupt or not The fade Bank will still raise interest rates this can be seen from the defeat's response this time namely when the second bank went bankrupt The Fate immediately announced that it would take over What does it mean because The Fate already knew that Bang would go bankrupt so there was no need to think about any precautions for the customer this was a sudden event but for the lecturer everything was to be expected then Was it taken over by him not necessarily because during the previous savings and loan crisis The Fate didn't take over so on the surface this crisis seems to have passed at a glance but in fact it could be a potential risk meaning that if the feat continues to raise interest rates what will happen it is not certain the only way to the solution to this crisis is to wait for the price to fall. 

If something happens in the future that can push the price up for example like a series of unexpected events like a war or an Asteroid hitting the earth then a financial crisis will really happen lastly one thing I would like to add is either friend's impression -friends What is it like about banks, basically banks are commercial institutions that are no different from other commercial institutions, for example restaurants, companies and shops. Everything is the same, they also need to make money, it's just that banks use our money to make money and profit together. 

what is harmed on the contrary is Profit Together, this is how it looks bang-bang in the world So basically we have to have a certain risk awareness towards banks just like companies in general banks will also go bankrupt especially if there is inflation banks are very afraid of inflation That is why there are two items whose prices are skyrocketed after this crisis first was gold and the other was Bitcoin which rose by around 20% but gold didn't rise by 20% so physical gold and digital gold will go up that's the ongoing banking crisis until now Then what is the impact of the collapse of svb with the Indonesian Banking industry based on opinions from several Indonesian economic experts the Minister of Finance of the Republic of Indonesia and the chief executive of the Financial Services Authority OJK can be concluded as follows 1 since the crisis occurred In 1998 the Indonesian Banking industry underwent a major overhaul or improvement The banking system in Indonesia became strong, 

resilient and stable, this is reflected in banking performance in Indonesia is well maintained and growing positively in the midst of economic pressure both domestically and globally 2 banking in Indonesia has no direct relationship As an investment holder or direct business relationship with SPB svb clients are mostly startup technology startups 3 banking average liquidity in Indonesia was very good in September 2022 the ratio of Liquid tools to Al third party funds or DPK was still high reaching 27.35% of banking assets was also maintained at a proportional composition with the composition of third party funds dominated by Current Accounts and shipping accounts or cheap lakes which were increasing so that it is not sensitive to movements in interest rates the results of monitoring the development of indicators related to economic and financial conditions both domestically regionally and globally according to the economic and financial reports for the period 6 to 12 February 2023 prepared by the Head of the Ministry of Finance's fiscal policy agency can be submitted stock indexes in the United States of America Europe and Asia, the majority of which are moving weaker than the Global economy. The development of economic growth in 2022 varies in various countries with various risks that still need to be watched out for from within the country. increasing based on the matters mentioned above along with views on handling the impact of the SPB collapse on the Indonesian economy or banking industry. if this banking crisis becomes a follow-up tracker of a global crisis like in 2008, regulator policy makers must act quickly to mitigate the impact of the risk of volatility due to the collapse, svb, this is a quote from the ministry's website.