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Federal Reserve and FDIC Decisions may Affect Small Banks in the US

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It is reported that Bob Elliot, a senior executive of Qianqiao Water Fund and CEO of Unlimited, an investment company, said in a social media message that the d

Federal Reserve and FDIC Decisions may Affect Small Banks in the US

It is reported that Bob Elliot, a senior executive of Qianqiao Water Fund and CEO of Unlimited, an investment company, said in a social media message that the decisions of the Federal Reserve and the Federal Deposit Insurance Corporation (FDIC) on the future of Silicon Valley banks may affect regional banks in the United States and cause them to face trillions of dollars of run risk. Bob Elliot disclosed data that nearly one third of the deposits in the United States are deposited in small banks, of which 50% are uninsured, and the proportion of uninsured deposits in credit cooperatives is even higher. According to the data of the Federal Reserve, as of February 2023, small banks in the United States have $6.8 trillion in assets and $680 billion in equity. The collapse of Silicon Valley banks will bring “the risk of running thousands of small banks”. （Cointelegraph）

Qianqiao Water Fund executives: regional banks in the United States may face trillions of dollars of run risk

Analysis based on this information:


Bob Elliot, CEO of the investment company Unlimited and a senior executive of Qianqiao Water Fund, expressed his concerns about the decisions of the Federal Reserve and the Federal Deposit Insurance Corporation (FDIC) regarding the future of Silicon Valley banks. According to Elliot, the fate of these banks may have a significant impact on regional banks in the United States, which could face trillions of dollars in run risk. Elliot revealed that almost a third of the deposits in the US are held in small banks, half of which are uninsured, and credit cooperatives have an even higher proportion of uninsured deposits.

The Federal Reserve’s data showed that as of February 2023, small banks in the US have assets worth $6.8 trillion and equity of $680 billion. Elliot warned that the failure of Silicon Valley banks could trigger “the risk of running thousands of small banks.” Elliot’s message is a warning that the major decisions made by the Federal Reserve and FDIC could lead to unforeseen consequences for small banks in the US, and hence, risk the stability of the financial system.

The message of Bob Elliot highlights the importance of regulatory decisions regarding Silicon Valley banks for the entire banking system in the US. As Silicon Valley banks are major players in the tech industry, their operations involve high risks and uncertainties. Hence, the decisions of the Federal Reserve and FDIC have significant implications for their future operations, stability and impact on the banking sector in general. Therefore, it is necessary for regulators to consider the potential consequences of their decisions beyond the Silicon Valley banks and on regional and small banks in the US.

In conclusion, Elliot’s message is a wake-up call for regulators to carefully consider their decisions and the potential impact on all banks in the US, especially small and regional banks, whose stability should not be undervalued. Key words in this context include Federal Reserve, FDIC, Silicon Valley banks, small banks, and uninsured deposits, which are crucial considerations for regulators and investors probing the banking industry in the US.

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