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March
16
2023

Silicon Valley Bank Collapse: Just How Safe Is The Banking System?
Matthew Piepenberg

Bank runs, Fed policy and Gold.

On Wednesday, March 8, 2023, Silicon Valley Bank (SVB) announced a $ 1.8B loss from the sale of investment securities.

Investors and depositors got spooked, withdrawing an estimated $42B+ in cash within a few hours–approx 25% of total SVB deposits, leaving a negative cash balance of $1B by Friday, March 10.

SVB was well known for its links to the Venture Capital (VC) and the Tech industry, with $209B in assets under management (AUM). It failed and went into receivership under the Federal Deposit Insurance Corporation (FDIC). SVB was the 16th-largest bank in the United States and was the largest bank by deposits in Silicon Valley.

On Sunday, the contagion out West hit the New York based Signature Bank, which also failed by bank run. The Treasury Department, Federal Reserve (FED) and the FDIC stepped in to calm the waters…

Matthew Piepenburg, Commercial Director at Matterhorn Asset Management, joins Michelle Makori, Lead Anchor and Editor-in-Chief at Kitco News, to discuss the ongoing Silicon Valley Bank collapse, and what it means for markets, gold, and Fed policy. Topics cover inflation, gold price, de-dollarization, Central Bank Digital Currencies and risk.

Despite years of central bank support and headline-making bailouts, private commercial banks face a myriad of operational and structural risks. MAM had already warned us of such banking risks well before the current crisis made headlines.

With over 20 years of experience as the General Counsel and, later, CIO of a highly-capitalized single family office (J.H. Johnson); as the Managing Director of a multi-billion, multi‐family office (Massey Quick & Co); and as the Managing Director to a multi-manager hedge fund specializing in managed futures, long/short credit trades and global macro dynamics), Matt has overseen the allocation of over $5 billion in investable assets over a full range of portfolios and alternative investment vehicles.

He has lead the quantitative and qualitative due diligence on hundreds of diverse hedge fund managers and strategies and has developed a unique expertise as to the best practices and diverse strategies of the world’s premier investment funds.

Matt graduated from Brown University, with highest honors (Magna Cum Laude, Phi Beta Kappa). He holds a Master’s degree and Juris Doctor from Harvard University and the University of Michigan respectively. Fluent in French and German, (having also worked at Dresdner Bank, Frankfurt) he is the author of numerous international white papers on macro conditions, asset classes and global risk management strategies.

Following his engagements with family offices, Matt became involved in structuring an launching hedge funds working closely with Morgan Stanley in selecting, allocating, and sizing the diverse, top-quartile portfolio managers which comprise a zero-beta multi-manager fund. With over two decades of experience investing in alternative investment vehicles, including selection of the managers within the aforementioned fund, Matt contributes a deep understanding of the strategies employed by carefully vetted managers and has an equally extensive grasp of constructing uncorrelated, multi-product/security portfolios around market themes with an omnipresent focus on market analysis and risk management.

Matt’s collective expertise has forged a strong understanding of macro forces and their essential role in selecting the most efficient and timely strategies for long term asset preservation and growth in current conditions and those to come. His widely acclaimed and user-friendly blogs, straight-talk and conservative/defensive approach to investing are invaluable components of the Signals Matter community.

 

www.signalsmatter.com