Lee Heidhues 3.19.2023
The online San Francisco Standard has achieved a presence in local media circles during its brief tenure.
Its coverage of the collapse of Silicon Valley Bank and the pending implosion of First Republic Bank are receiving daily exposure. There’s a reason for this detailed reporting as explained by Wikipedia
The San Francisco Standard is an online news organization based in San Francisco, California. It was funded in part by the billionaire venture capitalist Michael Moritz.
https://en.wikipedia.org/wiki/The_San_Francisco_Standard
Wealthy venture capitalists founded this publication which has done extensive reporting on political life in San Francisco. For example.
In May 2022, the Standard published a story showing that Boudin’s office secured three convictions for drug dealing in 2021, whereas Boudin’s predecessor George Gascón oversaw over 90 convictions in 2018. Instead, Boudin’s office emphasized convictions for a different crime which would not penalize foreign nationals with deportation or threats to naturalization.[8] The story generated secondary coverage in the National Review,[9]Washington Monthly,[10]Center for Immigration Studies,[11]Courthouse News Service.[12] The story was criticized by Matt Charnock of The Bold Italic for allegedly misrepresenting facts and contributing to xenophobic rhetoric.[1]
Earlier this year the New York Times published an Op ed penned by Michael Moritz which raised the hackles of many in San Franciso.
It is fair to surmise that the ownership of The San Francisco Standard has a vested interested in the fate of Silicon Valley Bank and First Republic so that it may continue its political coverage of the news.
The Standard 3.19.2023
San Francisco-based First Republic Bank suffered another blow on Sunday after S&P Global Inc. downgraded its long-term issuer credit rating from BB+ to B+, Bloomberg reported, making it harder and more expensive for the bank to borrow the very funds that could help it continue to stay afloat.
The downgrade comes as banks around the world are struggling to fend off catastrophe following the collapse of Silicon Valley Bank on March 10. It came just days after the bank’s debt rating was downgraded to junk status, and means that First Republic’s creditworthiness is considered highly speculative by the ratings agency.
The bank had already suffered downgrades from by S&P and Moody’s on Wednesday, moving it to a level considered a risky bet. S&P lowered the bank’s rating from A- to BB+, or high risk. Moody’s followed suit, downgrading the bank below investment grade.
Following the recent downgrades, a spokesperson for First Republic Bank said that the bank was well-positioned to manage short-term deposit activity thanks to the U.S.-orchestrated rescue by 11 of the bank’s competitors, which deposited $30 billion. The spokesperson said the support—which commentators have said was essential to stave off a systemwide crisis—reflects confidence in First Republic and its ability to continue to provide exceptional service to its clients and communities.
However, this latest downgrade suggests that First Republic Bank’s solvency is becoming increasingly fragile. It has been the subject of global attention as a possible next domino to fall in the context of the current crisis in bank solvency globally, which has been caused by a combination of factors, including low interest rates, economic uncertainty and rising levels of debt.
The recent deposit infusion from other banks is only a temporary solution, and the bank needs to find a more sustainable way to attract deposits to support its operations, according to S&P, Bloomberg reported. If the bank is not able to attract additional depositors and defend the value of its stock, its rating could be downgraded further, the report said.
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