Thai banks unaffected by two recent US bank failures

[BusyB]

3 minutes ago, BE88 said:

I don't think the US government cares much about foreign accounts.

The world financial system is based only on trust so lies are part of it, like the BOT.

 

Indeed, why should the US worry about Thai accounts? Hence my question. HSBC was badgered into buying up the UK accounts to protect UK startups, not UK banks, which is the thrust of my comments.

 

Beyond that the (Thai) banks have to answer question 2 of my post.

 

Question 3 is obviously going to be debated heavily in the coming weeks. It has been debated since the first basic civilizations went under thousands of years ago on the Euphrates after destroying their own environments. 

[KhunLA]

3 hours ago, IAMHERE said:

Well, it will be nice to find that the FDIC monies are really available for their intended use and been 'borrowed' by the Fed already. I'm betting nobody is made 'whole' until Congress agrees to increase the 'never to be paid back' debt limit yet again.

I hope there is a Thai equivalent to FDIC. I've got a bit over 800,000 baht at stake.

Same as the USA's FDIC's $250k USD, That bank deposits here are covered up to ฿1 mill per person/depositor, per bank.   Take into consideration, the FDIC has never been tested, and should have been back in 2008, but the bankers/shareholders got bailed out, as they, not the depositors (holding $250k or less), would have taken huge losses on the mess THEY created. 

 

Campaign financing was a great investment for them.

[Rimmer]

Troll post and replies removed

[vivananahuahin]

They were not affected also by the Covid pandemic do you remember? all closed and hands in hands with China to fight, they use the ostrich effect until everything will collapse, why is the PM so concern??

[John Drake]

3 hours ago, BusyB said:

Will foreign deposits also be protected?

Looks like they were. According to Reuters, SVIB had Chinese depositors some of whom are taking their US subsidized bailout and now putting the money in Chinese banks. 

Quote

SHANGHAI/HONG KONG, March 13 (Reuters) - Stunned by the sudden collapse of Silicon Valley Bank, the main go-to foreign bank for the majority of Chinese start-ups, entrepreneurs and venture funds are scrambling for alternatives despite U.S. regulators averting a banking crisis by guaranteeing all deposits of the troubled bank.

Chinese start-ups and fund managers said they are still looking to move their money out of SVB once they can. Some of them are turning to bigger U.S. banks, while a few Chinese lenders such as China Merchants Bank (600036.SS) and the Industrial & Commercial Bank of China are also rushing to fill the gap.   https://www.reuters.com/business/finance/chinese-start-ups-scramble-alternatives-svb-2023-03-13/

Meanwhile, China seems to be preventing Americans from getting their money out of China.  https://www.reuters.com/markets/billionaire-investor-mark-mobius-says-he-cannot-take-money-out-china-fox-2023-03-05/

Edited March 14, 2023 by John Drake

[nigelforbes]

20 minutes ago, John Drake said:

Looks like they were. According to Reuters, SVIB had Chinese depositors some of whom are taking their US subsidized bailout and now putting the money in Chinese banks. 

Meanwhile, China seems to be preventing Americans from getting their money out of China.  https://www.reuters.com/markets/billionaire-investor-mark-mobius-says-he-cannot-take-money-out-china-fox-2023-03-05/

If you are US resident or have a permission to remain, regardless of your nationality, your bank account is insured under FDIC rules. Permission to remain means having a visa, for example: 

 

"You must be living in the U.S. to open your account. You'll need to provide both a foreign and U.S. address, as well as two forms of ID and a tax identification number".

 

https://promo.bankofamerica.com/international-banking/professionals/#:~:text=You must be living in the U.S. to open your,and a tax identification number.

 

 

[John Drake]

8 minutes ago, nigelforbes said:

If you are US resident or have a permission to remain, regardless of your nationality, your bank account is insured under FDIC rules. Permission to remain means having a visa, for example: 

 

"You must be living in the U.S. to open your account. You'll need to provide both a foreign and U.S. address, as well as two forms of ID and a tax identification number".

 

https://promo.bankofamerica.com/international-banking/professionals/#:~:text=You must be living in the U.S. to open your,and a tax identification number.

 

 

Sound like they are living in the US? From the same Reuters article

 

Quote

"Withdrawal is the easiest option but no other bankers in the U.S. provide the level of services SVB used to offer," said an executive at a major Chinese investment bank, which has deposits at SVB via its private equity arm, adding that the bank's priority is to have at least "a few accounts" in the United States.

 

[nigelforbes]

1 minute ago, John Drake said:

Sound like they are living in the US? From the same Reuters article

 

 

You have to be US resident to hold a bank account, in that respect they are not foreigners.

[nigelforbes]

The connectivity of these issues struck me so I thought I'd lay out the sequence of events and the implications:

 

The Fed raises interest rates several times and a solitary bank fails to adjust its assets and liabilities. Short sellers spot the mismatch and place bets that the bank will fail. Slowly, the bets increase until almost everyone in the financial world has heard about the problem, even Moody's spots it and tells the bank it will be downgraded. VC’s advise customers to withdraw their funds and a bank run follows. Finally the FDIC decides to act and quickly takes over the bank.

 

But the ball has started rolling and it’s a big and important ball. Everyone starts to understand that raising interest rates has created an unrealised loss at many banks. This is because Treasury bonds held in the “hold to maturity” category now have a lower redemption value than previously when interest rates were lower. Depositors at other regional banks now think their funds are also at risk so they start to withdraw funds from the smaller banks, this imperils the smaller banks and all the account holders. Several regional banks begin to suffer liquidity problems which puts them at risk, the short sellers had moved in earlier and were betting on those banks also failing. Now all the funds from the smaller regional banks are flowing into the bigger banks so attention turns to them, consumers are afraid all the smaller banks will fail. Now the short sellers are targeting the bigger banks whose share values fall, this leads to large falls in the equity markets which hurts anyone with savings, investments or a pension fund. The cost to insure deposits at major international banks such Credit Suisse increase to high levels and now threatens the banks business, their customers business and all depositors,  

 

The value of USD falls because of bank default risk so exchange rates get hit and non-USD foreign currency holding consumers get hurt. The Fed sees what’s happening and decide they can no longer risk raising interest further to try and tame inflation which must remain high so everyone has to pay more for goods. Eventually one or two of the big banks have to be taken over which means people lose their jobs.

 

I think this is broadly where we are right now but we don’t have full sight yet of a large bank failure but one is clearly under great stress.

 

 

[John Drake]

10 minutes ago, nigelforbes said:

You have to be US resident to hold a bank account, in that respect they are not foreigners.

Here are the directions from the US government for how foreign companies can get a US bank account:

 https://www.trade.gov/sites/default/files/2021-05/Chapter 9 - Banking Checklist.pdf

 

The first step is to create a U.S. entity at the state level. This procedure is generally straightforward and completed documents can be processed within 24 to 48 hours.

 

• Once the entity is formed, you must file for a Federal Employer Identification Number (FEIN) (Form SS-4). This is the number you will use on your federal tax return. If the company officer who signs Form SS-4 is a U.S. citizen, you can apply for and obtain an FEIN immediately. If not, it could take two to three weeks.

 

• Once your FEIN is received, you can apply for a U.S. bank account.

 

• A bank account normally takes around three weeks to open, and in some cases requires an in-person meeting with the bank. A U.S. officer of the business, as designated in company documents, typically attends these meetings and has the authority to make decisions regarding a bank account.

[bigupandchill]

16 hours ago, steven100 said:

sad really .... I was hoping for collateral damage

Why? Do you think what might come after will be better than now?

[nigelforbes]

11 minutes ago, John Drake said:

Here are the directions from the US government for how foreign companies can get a US bank account:

 https://www.trade.gov/sites/default/files/2021-05/Chapter 9 - Banking Checklist.pdf

 

The first step is to create a U.S. entity at the state level. This procedure is generally straightforward and completed documents can be processed within 24 to 48 hours.

 

• Once the entity is formed, you must file for a Federal Employer Identification Number (FEIN) (Form SS-4). This is the number you will use on your federal tax return. If the company officer who signs Form SS-4 is a U.S. citizen, you can apply for and obtain an FEIN immediately. If not, it could take two to three weeks.

 

• Once your FEIN is received, you can apply for a U.S. bank account.

 

• A bank account normally takes around three weeks to open, and in some cases requires an in-person meeting with the bank. A U.S. officer of the business, as designated in company documents, typically attends these meetings and has the authority to make decisions regarding a bank account.

I'm not sure if you are trying to make a point here and if so, what it might be. A US company is a US company, it operates in the US under US law and in accordance with US business rules etc etc.

[John Drake]

5 minutes ago, nigelforbes said:

I'm not sure if you are trying to make a point here and if so, what it might be. A US company is a US company, it operates in the US under US law and in accordance with US business rules etc etc.

555  Read the document. It explains how foreign companies set up US shell entities, often just a single person, to get a US bank account. It's not too far removed from the manipulation of Thai nominees fronting for Chinese Triads in the Thai grey business scandal.

[JimGant]

6 hours ago, IAMHERE said:

Well, it will be nice to find that the FDIC monies are really available for their intended use and been 'borrowed' by the Fed already. I'm betting nobody is made 'whole' until Congress agrees to increase the 'never to be paid back' debt limit yet again.

Wrong. Depositors (including all foreign depositors) in the affected failed US banks are being made whole, regardless if their deposits exceed the $250K FDIC cap. This was quick-action Biden, but a no-brainer, since "bank run mentality" had to be avoided by those with deposits over $250K, which, incidentally, are a small minority. Seems to have worked, as no signs of "bank run mentality" as Monday dawned.

 

So, for depositors in Thai banks with deposits well over 1M baht -- don't worry. The Thai banking system and the gov't agencies that monitor this system -- are solid. As the DPA will cover over 90% of depositors (i.e., the average guy), those depositors above the 1M baht ceiling (me) should sleep soundly, knowing any bank hiccups would have depositors fully covered by any gov't with a modicum of sense.

[nigelforbes]

Just now, John Drake said:

555  Read the document. It explains how foreign companies set up US shell entities, often just a single person, to get a US bank account. It's not too far removed from the manipulation of Thai nominees fronting for Chinese Triads in the Thai grey business scandal.

Do you see monsters lurking in the closet or under the bed at night!

 

People set up companies in different countries for different reasons all the time, usually because they intend to do business and trade as a company. Of course there will be some people who open a business solely to obtain a bank account, it's a long convoluted and round about way to do that but nevertheless, some do so. 

 

How many people do that, out of the 332 million (less 6%) population, is it a meaningful number and what risks does it pose?  The risk I suppose is that a bank that has a foreign owned bank account, might go bust and that FDIC will have to pay out money to a person who doesn't live there. Is that a loss? Only in the same way that the DPA in Thailand will pay out up to 1 million Baht per account to non-Thai's!

 

How many accounts might this total? If you see things in your closet and under your bed at night, the number may well be in the millions or tens of millions. Otherwise I suspect it's a very small number, otherwise somebody would have almost certainly got on top of the problem, don't you think!

 

 

[BusyB]

37 minutes ago, nigelforbes said:

The connectivity of these issues struck me so I thought I'd lay out the sequence of events and the implications:

 

The Fed raises interest rates several times and a solitary bank fails to adjust its assets and liabilities. Short sellers spot the mismatch and place bets that the bank will fail. Slowly, the bets increase until almost everyone in the financial world has heard about the problem, even Moody's spots it and tells the bank it will be downgraded. VC’s advise customers to withdraw their funds and a bank run follows. Finally the FDIC decides to act and quickly takes over the bank.

 

But the ball has started rolling and it’s a big and important ball. Everyone starts to understand that raising interest rates has created an unrealised loss at many banks. This is because Treasury bonds held in the “hold to maturity” category now have a lower redemption value than previously when interest rates were lower. Depositors at other regional banks now think their funds are also at risk so they start to withdraw funds from the smaller banks, this imperils the smaller banks and all the account holders. Several regional banks begin to suffer liquidity problems which puts them at risk, the short sellers had moved in earlier and were betting on those banks also failing. Now all the funds from the smaller regional banks are flowing into the bigger banks so attention turns to them, consumers are afraid all the smaller banks will fail. Now the short sellers are targeting the bigger banks whose share values fall, this leads to large falls in the equity markets which hurts anyone with savings, investments or a pension fund. The cost to insure deposits at major international banks such Credit Suisse increase to high levels and now threatens the banks business, their customers business and all depositors,  

 

The value of USD falls because of bank default risk so exchange rates get hit and non-USD foreign currency holding consumers get hurt. The Fed sees what’s happening and decide they can no longer risk raising interest further to try and tame inflation which must remain high so everyone has to pay more for goods. Eventually one or two of the big banks have to be taken over which means people lose their jobs.

 

I think this is broadly where we are right now but we don’t have full sight yet of a large bank failure but one is clearly under great stress.

 

 

This basically what I was getting at. Right now they're whispering about 'pausing' further hikes. In the past 08 / 02 they had to ramp 'em right back down pretty quick ...

[nigelforbes]

1 minute ago, BusyB said:

This basically what I was getting at. Right now they're whispering about 'pausing' further hikes. In the past 08 / 02 they had to ramp 'em right back down pretty quick ...

If they pause rates hikes or drop them back down, inflation becomes real sticky, as in permanent and that's a problem.

[BE88]

3 hours ago, BusyB said:

 HSBC was badgered into buying up the UK accounts to protect UK startups, not UK banks, which is the thrust of my comments.

 

 

Yes only for SVB UK.

HSBC  I don't see how she was badgered acquire the English Bank by paying 1 pound for it.

Even if the SVB suffered losses it will always have assets to liquidate on more time.

 

 

[BusyB]

11 minutes ago, nigelforbes said:

If they pause rates hikes or drop them back down, inflation becomes real sticky, as in permanent and that's a problem.

Rock and a hard place .... it'll be interesting to see what they do ...

[nigelforbes]

1 minute ago, BusyB said:

Rock and a hard place .... it'll be interesting to see what they do ...

Imagine what the situation would be if they had done nothing, as one poster suggested!

[BusyB]

4 minutes ago, BE88 said:

Yes only for SVB UK.

HSBC  I don't see how she was badgered acquire the English Bank by paying 1 pound for it.

Even if the SVB suffered losses it will always have assets to liquidate on more time.

 

 

That's true, I think I confused something there - actually it is a good deal for HSBC 

[BusyB]

3 minutes ago, nigelforbes said:

Imagine what the situation would be if they had done nothing, as one poster suggested!

I'd rather not ... tens of thousands of commercial companies folding would potentially worse than 2008 - that's why they guaranteed the deposits so fast. Shareholders and the rest lose out for a change.

 

It's especially critical because this is the economy's pioneer sector - tech innovation, hardware and software.

Edited March 14, 2023 by BusyB

[BE88]

8 minutes ago, BusyB said:

That's true, I think I confused something there - actually it is a good deal for HSBC 

If HBDS was chosen for the purchase it should be assumed that there are many accounts of Chinese-owned companies to safeguard.

 

[John Drake]

Lazy or incompetent depositors put themselves into this situation. There were ways to protect deposits above $250,000. But they couldn't be bothered.

 https://www.forbes.com/advisor/banking/ways-to-insure-excess-deposits/

[crazykopite]

Not surprised with that statement I doubt that the Silicone bank has a branch in Thailand the only silicone is planted in those who want bigger boobs and butts and most of them are found in the local lady bars   : )

[BritScot]

7 hours ago, SiSePuede419 said:

Amazing how many International Banking experts there are here. ????

Maybe because many people pay attention to banking due to recent events and realisations that every bank sits on a knife edge due to the 10/1 ratio which means every say £1 they have in assets they can lend £10 of basic fresh air. Have you ever walked into a Thai Bank and looked at their repossessed property for sale? These properties are at a much higher market price (some I have seen twice the market price) 'magic accounting'. Feeling safe????

[crazykopite]

7 hours ago, Frankie baby said:

I thought that HSBC was about to take over the Silicone Valley bank for the sum of its debts. Or has this been binned because of the Chinese connection?

HSBC have paid £1 for the U.K. branch so U.K. investors have been assured that there money is safe 

[BritScot]

1 hour ago, BE88 said:

If HBDS was chosen for the purchase it should be assumed that there are many accounts of Chinese-owned companies to safeguard.

 

For £1. Can't really go wrong at those losses..... lol

[Liverpool Lou]

7 hours ago, Frankie baby said:

I thought that HSBC was about to take over the Silicone Valley bank for the sum of its debts. Or has this been binned because of the Chinese connection?

Maybe it was "binned" because of the UK connection, HSBC is a British bank.

[Dart12]

the Thai will fall in line once they see the reasoning and can get the population technologically up to speed.

This is just the necessary hysteria needed drummed up to start pushing hard the complete and only digital currency CBDC in the USA.

You'll see a couple more Banks fail.  You'll see how the FDIC will cry they can't insure it any longer.  You'll see mass news about it, and how CBDC is the only solution via the gov.

Just like the pandemic was the excuse to derail logistics, industry, and push a huge hidden tax (inflation) to put their heel on the middle class.

They are not even hiding anything since the beginning of the 'pandemic'.

The Western  powers that be have those green eyes for the Chinese government structure and control.