March 22, 2023 | Seattle, WA
TF Labs and Niftmint had the pleasure of welcoming three experts in the fields of financial law, digital assets, and Web3 technology last Wednesday to give their perspectives on the recent banking crisis. Members of the Seattle financial community gathered at 5:00pm at the TF Labs office for light hors d’ouerves, drinks, and of course networking!
TF Labs and Niftmint founder Jonathan G. Blanco kicked off the live panel discussion and roundtable conversation by discussing the new developments surrounding the recent banking crisis that has impacted Silicon Valley Bank, Silvergate Bank, Signature Bank, First Republic Bank, and Credit Suisse.
Joseph Vincent, an attorney at law who spent 18 years as general counsel for the Washington Department of Financial Institutions, began the session with his depiction of the downfall of each bank, contrasting Silvergate Bank with Silicon Valley Bank, stating that Silicon Valley Bank, whose banking relationships were primarily with VCs, startups, and healthcare, wasn’t related to crypto. Instead, Silicon Valley Bank had an “interest rate risk associated with an inverted yield curve that exists right now.” Joe explained that they were heavily invested in the long bond, the 10-year mortgage bond, where their long-term investments in long-term bonds were at vastly lower interest rates.
Ivan Inchauste, director of finance and capital markets at Stably added, “What we now know is that financial institutions are so interconnected, that problems brewing in one bank or even a small subsection of banks that serve a particular industry, can spread like wildfire, and that's fundamentally what a bank does. They take deposits in from depositors that can remove those deposits pretty much on demand whenever they want when the bank is open and then they lend money or invest that money in longer-term assets, whether it's mortgage-backed securities in the case of Silicon Valley Bank or loans to tech companies. There's a fundamental mismatch between assets and liabilities.”
Finally, Renatta Fairbanks, a financial controller focusing on #Web3 businesses, furthered the conversation by adding, “there was an asset and liability duration mismatch - they couldn't liquidate their assets as quickly and match it to the customer deposits, which is viewed as liabilities on the balance sheet.”
Hearing from these three experts shed light on this and answered critical questions amid this latest banking crisis. Watch the full panel of “The Recent Banking Crisis.”
TF Labs and Niftmint will continue to host Web3 events throughout the year, with a current plan to host two events per month. The next event will take place on April 5, 2023, and will be a live panel and round table discussion on "Crypto Taxes, Reporting, and Accounting" just in time for tax season!