Recently I learned from a friend that Silicon Valley Bank had been acquired by the United Kingdom-based HSBC. He knew that because he is a customer of the SVB and he had received an email with details.
HSBC, the bank based in London, is actually the Hong Kong Shanghai Bank Corporation, a bank wholly owned by Chinese interest. On my Tuesday broadcast, I went to the air waves explaining how the Federal Deposit Insurance Corporation had partnered with a China-owned bank to acquire SVB and no big deal was made about it. State by state there is an effort to prevent China from owning farmland but here they are acquiring our lending institutions.
After that aired, I quickly learned that HSBC had only acquired the UK division of the SVB and the assets in the United States are still (at the time of this writing) unknown as to their future ownership. So that sent me digging for more information.
It turns out the SVB had 2,000 investment firms from China as customers. In fact, it appears that the tie to China was quite extensive. Last week Quartz Magazine reported that:
The crown jewel of its global operations was China, where it served more than 2,000 clients and advised government regulators eager to make their banking system more innovation-friendly.
“We’re a model bank for China,” Dave Jones, a 23-year SVB veteran who served as chief credit officer before being dispatched to run the bank’s China operations, said in a 2019 interview.
“There have been times when [the Chinese government] has specifically referenced us” in regulatory documents, he added.
I have learned that California Gov. Gavin Newsome and his wife have ties to the SVB as they run a non-profit that his wife started with an infusion of $100,000 from SVB and they share board members.
In addition, Peter Thiel was the very first person who withdrew a large sum of money from the bank leading to the rush of others demanding their money. Now Thiel says that he had $50 million of his own cash tied up in the bank, so none of this really makes any sense to me.
The Wall Street Journal has reported some other troubling information about the actions in the days leading up to March 9, 2023, shut down of the bank by the FDIC:
SVB turned to plan B, asking the San Francisco FHLB to move $20 billion of collateral to the Federal Reserve’s discount window, where it could get emergency funding, the people said. SVB had roughly $20 billion available for financing at the San Francisco FHLB, according to the people familiar with the matter.
“We were well under way with the transfer of collateral and were waiting for a call from the Federal Reserve and SVB,” a spokesperson for the San Francisco FHLB said. “And while we were waiting for a call, the FDIC took over SVB.”
There are two reasons I think it is worthy of more time and fact finding. First, the feds are now trying to call this SVB incident “the tip of the iceberg” of the financial mess these “regional banks” are in the middle of. This bank had institutions around the world, how can they call the 16th largest bank in the United States a regional bank?
Today we are only identifying the problems as I see them and I will continue to search for the missing cows to complete the herd.
Editor’s note: The views expressed here are the author’s own and do not represent the views of High Plains Journal. Trent Loos is a sixth generation United States farmer, host of the daily radio show, Loos Tales, and founder of Faces of Agriculture, a non-profit organization putting the human element back into the production of food. Get more information at www.LoosTales.com, or email Trent at [email protected].
