Silicon Valley Bank's bankruptcy affects multiple collection agencies!

On March 10, the stock price of Silicon Valley Bank plummeted 60%. Subsequently, Silicon Valley Bank declared bankruptcy. From the sudden collapse to bankruptcy, this American bank attracted the attention of many cross-border people and made them sleepless for a time. Among them were sellers who had deposits in Silicon Valley Bank and multiple payment service providers.

Although the Federal Reserve and others have announced that they will back Silicon Valley Bank and protect all depositors' rights and interests, with the suspension of trading of many US banks and the Federal Reserve's interest rate hike, many industry insiders are even more panicked. Will the US dollar index weaken? Should they convert foreign currency into RMB? What will the spending power of Americans be like in the future? Will the sellers' orders increase or decrease?

Silicon Valley Bank's bankruptcy affects a group of sellers

There were signs of Silicon Valley Bank's collapse a long time ago. Industry insiders said that Silicon Valley Bank had been facing a liquidity shortage since the end of last year, and many Silicon Valley Bank depositors who received internal information had already begun to transfer their deposits.

According to foreign media reports, in order to meet depositors' withdrawal demands, Silicon Valley Bank sold bonds worth $21 billion at low prices , but it also caused huge losses to itself. Various remedial measures were taken later, but they were of no avail. Instead, the situation became worse and worse, eventually leading to bankruptcy.

The bankruptcy of Silicon Valley Bank also triggered a series of turmoil. Since most of Silicon Valley Bank's depositors are American technology startups, their capital chain is relatively tight. For them, if they withdraw money one or two days late, it may cause a chain reaction, such as the company's loan cannot be followed up, and employees' wages cannot be paid, which may also affect their consumption in the future.

Originally, many sellers viewed this matter as a bystander, but more and more realities made some sellers uneasy, because some sellers and some collection agencies were also involved in the bankruptcy of Silicon Valley Bank.

"I have over 10 million dollars in Silicon Valley Bank and I have never withdrawn it," said one seller. There are many sellers who have done the same thing. They have trusted Silicon Valley Bank and deposited 20 million dollars or even more, but they have not withdrawn it yet. Some sellers also said that their tens of millions of dollars in Silicon Valley Bank are just idle money and will not have a big impact.

Jiuan Medical also issued an announcement yesterday, stating that the company has deposits in Silicon Valley Bank, accounting for about 5% of the company's total cash assets and financial assets, while the company's other deposits are mostly in large financial institutions such as JPMorgan Chase in the United States. At the same time, the company will transfer this deposit to other large financial institutions as soon as possible.

A list of some companies that still have deposits in Silicon Valley Bank shows that a well-known service provider with a name starting with P has deposits of up to 20 million US dollars in Silicon Valley Bank. It is understood that this part of funds is only a small part of the cash assets of the service provider. Their more assets are distributed in multiple banks, and there is no risk of bankruptcy due to the bankruptcy of Silicon Valley Bank.

Some sellers pointed out that after the Silicon Valley Bank bankruptcy incident, they immediately contacted another well-known service provider with a name starting with P, and learned that the service provider had information about dozens of Silicon Valley Bank accounts in 2016. The sellers may withdraw cash a few days later. Some sellers tried to withdraw one million from the service provider to confirm whether there was a problem with the funds and whether the funds could arrive on time.

"We have been using Kong*** to receive payments. This time I heard that they also deposited money in Silicon Valley Bank. I wonder how much impact it will have?" A seller asked on a social forum.

It is understood that Air China has notified many customers, suggesting that sellers stop using their existing Silicon Valley Dollar Global accounts at Air China and choose a new Dollar Global account. It also suggests that sellers ask payers to immediately withdraw any funds sent to Silicon Valley Bank's global account.

It seems that many sellers’ accounts have been affected by the bankruptcy of Silicon Valley Bank. But for sellers, the Fed’s announcement seems to have brought a turnaround.

The US government is backing up depositors' deposits. Can the gloom be temporarily alleviated?

It is understood that the US financial regulator has set up a new loan program funded by the US Treasury to back the deposits of Silicon Valley Bank depositors. That is, starting from Monday, March 13, depositors will be able to withdraw all their funds. The new program will provide emergency loans for up to one year.

Even after receiving the "reassurance" from the US government, Silicon Valley Bank's depositors still wanted to withdraw their money as soon as possible. According to foreign media reports, long queues formed in front of Silicon Valley Bank's various branches after the branches opened on Monday local time in the United States.

The deteriorating situation seemed to be under control, but it was not.

The shares of large US banks opened lower recently, and even several banks including First Republic Bank and Alliance West Bank announced suspension of trading. Industry insiders speculate that after Silicon Valley Bank, several regional banks may follow suit. In the past year, the net interest margins of these banks have narrowed or expanded the least.

The bankruptcy of Silicon Valley Bank was caused by the rapid rate hike. After this wave of bankruptcies, the Fed may adjust its pace of rate hikes. In the past 12 months, the Fed has raised interest rates eight times. It is expected that after the release of inflation data in February, the Fed will raise interest rates by another 25 basis points. However, after the bankruptcy of Silicon Valley Bank, many institutions expect that the United States may no longer raise interest rates, and the trend of the US dollar is likely to be affected.

According to data from the Foreign Exchange Trading Center, on the morning of March 14, the central parity rate of the RMB against the US dollar was 6.8949 yuan, up 426 basis points from the previous trading day's central parity rate of 6.9375 yuan. The RMB central parity rate has appreciated for three consecutive trading days, with a cumulative increase of more than 700 basis points.

The continued strengthening of the RMB has brought joy to some and sorrow to others. It is a good thing for import companies, but it is a great pressure for cross-border e-commerce sellers. The sharp rise of the RMB also means that the exchange rate of the US dollar will weaken. If the sellers fail to grasp the right time to convert the exchange, they may lose a lot of money. However, some sellers are very foresighted and have converted all their US dollars last Friday.

Industry insiders are also looking forward to a possibility: if the Federal Reserve does not raise interest rates, will it bring new vitality to the US economic market? Will consumers be more inclined to consume and increase demand for goods and services? Will the sellers' sluggish order volume improve?

Obviously, this is still an unknown. But for cross-border sellers, the bankruptcy of Silicon Valley Bank is not an isolated case, and similar things cannot be ruled out in the future. Therefore, when choosing service providers and banks, more comprehensive considerations and earlier arrangements should be made to reduce the risks of overseas funds.

On March 10, the stock price of Silicon Valley Bank plummeted 60%. Subsequently, Silicon Valley Bank declared bankruptcy. From the sudden collapse to bankruptcy, this American bank attracted the attention of many cross-border people and made them sleepless for a time. Among them were sellers who had deposits in Silicon Valley Bank and multiple payment service providers.

Although the Federal Reserve and others have announced that they will back Silicon Valley Bank and protect all depositors' rights and interests, with the suspension of trading of many US banks and the Federal Reserve's interest rate hike, many industry insiders are even more panicked. Will the US dollar index weaken? Should they convert foreign currency into RMB? What will the spending power of Americans be like in the future? Will the sellers' orders increase or decrease?

Silicon Valley Bank's bankruptcy affects a group of sellers

There were signs of Silicon Valley Bank's collapse a long time ago. Industry insiders said that Silicon Valley Bank had been facing a liquidity shortage since the end of last year, and many Silicon Valley Bank depositors who received internal information had already begun to transfer their deposits.

According to foreign media reports, in order to meet depositors' withdrawal demands, Silicon Valley Bank sold bonds worth $21 billion at low prices , but it also caused huge losses to itself. Various remedial measures were taken later, but they were of no avail. Instead, the situation became worse and worse, eventually leading to bankruptcy.

The bankruptcy of Silicon Valley Bank also triggered a series of turmoil. Since most of Silicon Valley Bank's depositors are American technology startups, their capital chain is relatively tight. For them, if they withdraw money one or two days late, it may cause a chain reaction, such as the company's loan cannot be followed up, and employees' wages cannot be paid, which may also affect their consumption in the future.

Originally, many sellers viewed this matter as a bystander, but more and more realities made some sellers uneasy, because some sellers and some collection agencies were also involved in the bankruptcy of Silicon Valley Bank.

"I have over 10 million dollars in Silicon Valley Bank and I have never withdrawn it," said one seller. There are many sellers who have done the same thing. They have trusted Silicon Valley Bank and deposited 20 million dollars or even more, but they have not withdrawn it yet. Some sellers also said that their tens of millions of dollars in Silicon Valley Bank are just idle money and will not have a big impact.

Jiuan Medical also issued an announcement yesterday, stating that the company has deposits in Silicon Valley Bank, accounting for about 5% of the company's total cash assets and financial assets, while the company's other deposits are mostly in large financial institutions such as JPMorgan Chase in the United States. At the same time, the company will transfer this deposit to other large financial institutions as soon as possible.

A list of some companies that still have deposits in Silicon Valley Bank shows that a well-known service provider with a name starting with P has deposits of up to 20 million US dollars in Silicon Valley Bank. It is understood that this part of funds is only a small part of the cash assets of the service provider. Their more assets are distributed in multiple banks, and there is no risk of bankruptcy due to the bankruptcy of Silicon Valley Bank.

Some sellers pointed out that after the Silicon Valley Bank bankruptcy incident, they immediately contacted another well-known service provider with a name starting with P, and learned that the service provider had information about dozens of Silicon Valley Bank accounts in 2016. The sellers may withdraw cash a few days later. Some sellers tried to withdraw one million from the service provider to confirm whether there was a problem with the funds and whether the funds could arrive on time.

"We have been using Kong*** to receive payments. This time I heard that they also deposited money in Silicon Valley Bank. I wonder how much impact it will have?" A seller asked on a social forum.

It is understood that Air China has notified many customers, suggesting that sellers stop using their existing Silicon Valley Dollar Global accounts at Air China and choose a new Dollar Global account. It also suggests that sellers ask payers to immediately withdraw any funds sent to Silicon Valley Bank's global account.

It seems that many sellers’ accounts have been affected by the bankruptcy of Silicon Valley Bank. But for sellers, the Fed’s announcement seems to have brought a turnaround.

The US government is backing up depositors' deposits. Can the gloom be temporarily alleviated?

It is understood that the US financial regulator has set up a new loan program funded by the US Treasury to back the deposits of Silicon Valley Bank depositors. That is, starting from Monday, March 13, depositors will be able to withdraw all their funds. The new program will provide emergency loans for up to one year.

Even after receiving the "reassurance" from the US government, Silicon Valley Bank's depositors still wanted to withdraw their money as soon as possible. According to foreign media reports, long queues formed in front of Silicon Valley Bank's various branches after the branches opened on Monday local time in the United States.

The deteriorating situation seemed to be under control, but it was not.

The shares of large US banks opened lower recently, and even several banks including First Republic Bank and Alliance West Bank announced suspension of trading. Industry insiders speculate that after Silicon Valley Bank, several regional banks may follow suit. In the past year, the net interest margins of these banks have narrowed or expanded the least.

The bankruptcy of Silicon Valley Bank was caused by the rapid rate hike. After this wave of bankruptcies, the Fed may adjust its pace of rate hikes. In the past 12 months, the Fed has raised interest rates eight times. It is expected that after the release of inflation data in February, the Fed will raise interest rates by another 25 basis points. However, after the bankruptcy of Silicon Valley Bank, many institutions expect that the United States may no longer raise interest rates, and the trend of the US dollar is likely to be affected.

According to data from the Foreign Exchange Trading Center, on the morning of March 14, the central parity rate of the RMB against the US dollar was 6.8949 yuan, up 426 basis points from the previous trading day's central parity rate of 6.9375 yuan. The RMB central parity rate has appreciated for three consecutive trading days, with a cumulative increase of more than 700 basis points.

The continued strengthening of the RMB has brought joy to some and sorrow to others. It is a good thing for import companies, but it is a great pressure for cross-border e-commerce sellers. The sharp rise of the RMB also means that the exchange rate of the US dollar will weaken. If the sellers fail to grasp the right time to convert the exchange, they may lose a lot of money. However, some sellers are very foresighted and have converted all their US dollars last Friday.

Industry insiders are also looking forward to a possibility: if the Federal Reserve does not raise interest rates, will it bring new vitality to the US economic market? Will consumers be more inclined to consume and increase demand for goods and services? Will the sellers' sluggish order volume improve?

Obviously, this is still an unknown. But for cross-border sellers, the bankruptcy of Silicon Valley Bank is not an isolated case, and similar things cannot be ruled out in the future. Therefore, when choosing service providers and banks, more comprehensive considerations and earlier arrangements should be made to reduce the risks of overseas funds.

Silicon Valley Bank

Cross-border sellers

Collection Agency