breaking news this morning regulators sweeping in to contain a financial crisis depositors of silicon valley bank and signature bank protected. futures are higher we have all of the market action and pause for the fed. did the svb collapse put the fed on hold for march? the investors caught in the middle of it all are they breathing a sigh of relief it is monday, march 13th,

2022023 a special edition of "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc we are back from the shortest week of the year and not because of daylight saving time, but everything happening this weekend. the negotiations taking place. we are live from the nasdaq market site in times square. i'm becky quick along with andrew ross sorkin joe is off today if you are just waking up, it was a week for regulators after the collapse of soofilicon vall bank the federal reserve and fdic moved to secure depositors at svb. they are guaranteeing all deposits regulators took control of signature bank it was one of the banks for

cryptocurrency companies and depositors will be protected above the $250,000 limit the fdic insures the fed created a new lending facility with the authority to meet demands for withdrawals and any potential run on any banks we will have the latest with steve liesman here in studio this morning we should tell you that hsbc is buying the silicon valley bank uk it will protect the deposits of uk clients that deal went through for 1 pound. also, regional bank is getting lending from the federal government it is trading down 58%. we want more market reaction

you see the equity futures at this hour showing positive signs. dow jones industrial average up 58 s&p up 19. nasdaq up 85 this comes after the rough week for the markets. last week, dow down 4.4% s&p down 4.5%. the nasdaq off 4.7%. if you look at treasury markets this morning, last week, there was a flight to quality on friday you saw yields down across the board. that is continuing this morning. right now, the 10-year treasury is down at 3.605%. 2-year treasury at 4.347% after being above 5% on thursday finally, let's look at the dollar and see where things stand. you see right now the dollar is a little weaker. down .50%. to add this, crypto circle will be made whole

the company saying $3.3 billion in reserves tied to stablecoin held by silicon valley bank will be available when banks reopen today. that was a concern all weekend usdc is the second biggest stablecoin with $37 billion. it was pegged to the all-time low on saturday. it now recovered most of the losses after several investors would honor the exposure now it doesn't have that problem. separately, other cryptocurrency rallying after the fed intervened to limit the fallout from silicon valley bank you might think it should be the other way around. >> does anybody see the irony? it is the dollar and central bank backs the bitcoin and others >> bingo. >> i want to make sure you saw that >> i was very aware of the irony. dripping >> the thing that is the replacement for the dollar

requires the dollar to rescue it >> steve >> i'm here. >> you don't need a proper introduction we are thrilled to have you after a wild one i know you were working the phones the last 48 hours >> no weekend for us i want to start, andrew, a weekend similar to the great financial crisis regulators scrambling to take historic steps to shore up the failure of silicon valley bank on friday. the second largest failure in u.s. banking history some call the first bank run in the digital age. created a run on smaller banks around the country and companies with the money in silicon valley bank would not open up this morning and make payroll it looks like now as if none of that is going to happen. in response to this, officials over the weekend guaranteed deposits at svb. shutdown signature bank.

a crypto bank in new york. guaranteed all uninsured deposits for the second time in 20 years created a new fund to finance bank assets at the federal reserve and ease lending standards with the emergency discount window. officials took the steps to avert the situation where uninsured depositors wouldpull money from healthy banks they insist the banking system is strong. there is not a problem around the country. the securities is money good the main problem is rates are up and bond prices are down that creates a large unrealized loss on the books of the banks not much default risk which is the difference from the great financial crisis how does this impact fed policy? the market is on the move. i did not see this 38% chance it was 28 the last time i

looked 38% chance the fed does nothing. remember, there had been a strong bet on 50 points last week before silicon valley bank blew up and jay powell spoke markets now betting that the banking crisis is taking the wind out of the fed's rate hiking sails i don't know if that is the case i'm reminded the bank of england and what it did last fall. they had a problem with the pensions with the higher rates >> i remember. >> they halted their qt. selling of assets for a month and came back and did it again that may be the example here. >> can i ask, in that situation, pensions had to act quickly and forced to take painful measures. >> there was a question throughout the central banking world. was andrew bailey serious about res resuming he did >> all of the unrealized losses

with the banks and saying you have a time-out and a month to get your act together. some of the big banks have huge number of the -- i was saying to andrew last friday during commercial bank. htm is the new ceo crisis averted >> let me go through that carefully. the new fed window which allows them to take -- >> $25 billion to call $250 billion. >> it is unlimited fund. all uninsured deposits in the country. you can take the mortgage back securities and get financing at par as opposed to market value. >> are the banks all going to do that they have a lot of this stuff out there. >> they don't necessarily have to which is how i answer the second question. it is valuable to spend time and

talk about how svb was unique. everybody has unrealized losses on their books that is okay if you don't have a flighty deposit base you want to put together a bank and you got business from a bunch of runners sprinters. they were concentrated they did not manage and did not hedge interest rate risk they appeared to have a lousy duration of assets >> long duration >> all realized risks and gains and losses on the banks. that won't matter if everybody pu pulls their money out. >> i think a lot of people on main street said wait. i haven't thought about it before you made the point on "meet the press" with the digital bank run for the first time ever. it is faster where you move the money. >> a lot of talk of what role peter thiel and vc people think.

>> a lot of people are screaming fire in a crowded theater. that is what happened. there is an element -- >> i don't agree with that >> i don't think that works. >> and in an age of social media and age of the digital ability to move your money -- by the way, one reason nobody wanted to buy this bank over the weekend is this is a flighty customer base this customer base doesn't stick with you the customer base got up and went on the basis of peter thiel. that's how it happened >> nobody wanted to buy it look at jpmorgan chase when it bought with bear sterns? they got sued for it is a bank coming in and stepping up for another bank? >> first, i don't think jpmorgan chase was in the hunt in large part because of that the government this weekend, to

put some reporting on this, would try -- >> as opposed to speculation >> no, no. trying to push a regional bank early on to buy for different reasons because they didn't want a big bank to buy it >> it is not sold. >> it is not sold and probably not be bought at all. >> i want to turn the tables there are two scenarios here one is, this is the bear sterns to the lehman this was a curtain raiser. that is metaphor number one. metaphor number two. this is groundhog day? i wish joe were here this time we got it right. this time we are replaying the crisis and instead of acting incrementally and ideological -- >> i think that is important >> instead of trying to make a point of moralh hazard.

>> i think we are closer to the second in the next several weeks and months as we see not failures, but flight in money. i don't think it is over i think if i had my money at these regional banks -- i think some people will move some money. >> i think it would be crazy to not if you have more than $250,000 in a bank the fdic ensures up to $250,000. $500,000 if it is a joint account. >> the entire purpose of what the government has said last night is to tell the american public we got your back. we are guaranteed for now across the board. we have just done -- >> for a year. >> for a year. >> you still think there are more failures to come. >> i think there are definitely -- i don't know failure.

more mergers it will be rocky it will be bumpy >> let me answer becky's question before we go to break >> i forgot the question. >> the raising of the comment. why haven't we seen more at this point? we have been through the biggest interest rate increase by the fed in 40 years. it is not unusual. by the way, ladies and gentlemen, banks fail. sometimes business models don't end up being appropriate for the environment. it is not unheard of >> i'm not saying this is idiosyncratic, but if this bank, silicon valley bank, had been a bank you never heard of in the middle of nowhere without clients strcreaming on twitter h give enormous money to politicians who have the start-up community and you can drape your flag in the start-up

community you are supporting i don't believe people said it was systemic i don't.payroll. he is not going to make payroll. this is terrible if this was a bank in the middle the of america and farmers were going to miss payroll, this is not going to happen. >> this is a top 20 bank it is number 16 in terms of the largest banks out there. >> second largest failure in history. >> it is terrible to go along with it. >> i'm not going along with it >> it will be systemic it was a top 20 bank i'll turn the tables and say how come none of the regulators saw it a top 20 bank not messing with cryptocurrency can i finish this was a classic case where you are, you know, borrowing

short and lending long and this was with treasuries. they didn't do anything wrong. they got the risk assessment wrong. >> for the last 15 years, the government, we, everybody has been focused almost specifically on the big banks capital ratios stress tests for the big banks >> stress tests are wrong. >> we didn't focus on the small banks. that was a mistake the second component of it, you had svb and some of the smaller banks, signature of the others, all lobbying for last secretary d -- decade, all in the senate to undo regulations that weren't in dodd dodd-frank, but would have kept them from being described as

systemically important bank. ywhy were they able to do that? they sat in front of the senate and said we helped small-business smartups. we need to compete with the big banks. that's what they told everybody. the trump administration did not help anybody i don't want to blame anybody here all of these things here took place over the last decade. >> a lesson. >> that's why we're here. >> a lesson in threshold management how big was svb? $209 billion in assets threshold for scrutiny 250. becky, regulators spend a lot of time looking at the asset side they don't look at the liability side and deposdeposits >> there was an accounting rule if you hold these to maturity, you don't have to take the losses or put it on the balance

sheet. in the stress test, we have liquidity and all of the banks have liquidity, but not looking at that simple issue of mark-to-market if you mark-to-market, where do you stand? the fdic of hold to maturity securities for the banks, $368 billion. >> 600 >> that is the unreal eized losses $689 billion hold to maturity, that is the other component. that's the question. none of that comes up in the stress test. that's why i'm comparing it because it is not mark-to-market that's my point. >> okay. >> we will continue the conversation >> we have four hours. >> we have three hours to go with this. if you are just waking up and checking the markets there is calm. green arrows here.

dow futures up 30 points s&p futures up 14. nasdaq up 75 all of this coming after the news that regulators were going to protect the depositors of silicon valley bank and signature banks. this is abig deal. this is meant to cause the calm. it is what is happening here. did the weekend events put the fed on pause goldman sachs thinks so. we will get into that next you are watching "squawk box" and this is cnbc ♪♪ for skin as alive as you are... don't settle for silver. harness the power of 7 moisturizers & 3 vitamins to smooth, heal, and moisturize your dry skin. gold bond. champion your skin. ♪♪

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welcome back to "squawk box. goldman sachs says it no longer sees a case for the federal reserve to hike interest rates at the meeting next week citing what they call the obvious recent stress. the economist downgraded from the 25 basis point hike to zero. the bank still expects to see 25 point hikes in may and july. this points what we were watching, steve. >> two reasons one is the decline in what has happened in the banking system could reduce economic activity the other is the strategic one where we talk about the un unrealized gains if you do less, interest rates fall and prices of the bonds rise >> again, if you are just waking up futures are showing in the green for s&p and nasdaq the dow futures have just turned

negative down 35 points nasdaq up 47 s&p up 6 for more on the svb implosion and capital market, we bring in sri. sri, i know you were watching this closely this weekend waiting to see what the fed would do this weekend and what the treasury would do. what do you think of the announcement they come out with? >> i think there will be a lot more bailouts coming this is only the start, becky. i said on the program for the last year that it will be a credit tightening program. that will bring this thinking to an end i also believe as the goldman sachs forecast says, there is no increase on march 22nd i expect qt at some point also to end quickly and qe to resume

in other words, we are going to give up on anything that we do about inflation control and switch the first change of my forecast to your watchers over the last year has happened. more will happen here is something else what we had are two kinds of risks in holding fixed income security one is the credit risk and the second is duration risk. what the 2008 crisis told us is to limit the credit risk and therefore u.s. treasury holdings were called risk free with no reserves put against them. we have learned they may not have credit risk, but enormous duration risk. a paper at jackson hole last august points out that during qe, it was easy to make money by

mismatches maturities. you borrow short and lend long and you did fine because lo long-term yields aring e going n you will not have the change and mismatch continues to exist. that causes further accidents down the line. look at what the market is saying today, becky. the futures are turning negative on the equity side on the fixed income, the 10-year treasury is still going down there is a movement toward safe ra haven. that says the market is cautious despite the bailout we have just seen announced >> let's talk about that we were just saying that the lessons learned from 2008 is you can't do it piecemeal or teach

moral hazard up front where are you concerned in terms of depositors being worried about this or anybody who owns stock or bonds in one of the banks needs to be concerned? we call it a bailout we should point out there is no taxpayer dollars spent on this this is the fdic and fdic will assess this on banks >> can i make one point of fact on the tax front i have been thinking about this all night. janet yellen has been telling everybody this is not -- put the bailout word aside no taxpayer money involved in this that is not totally true there's $25 billion that was originally being used for stabilization fund that is moved. treasury doesn't have money -- it comes from taxpayers. >> you can't -- it is a backstop which is only in the event of

losses. >> right. >> that stabilization fund is sitting there. it doesn't do anything it has no actual purpose >> that is taxpayer money. >> it is behind the losses i think the banks are in front of those taxpayers >> becky and andrew, if i may jump in on what you said i agree there is taxpayer money involved the emergency loan they will provide is going to give you 100 cents on the dollar for the securities you are holding whereas the securities have fallen in value. if that causes more losses, taxpayers will bear the burden of it. >> come on sri, be serious here that is not a serious comment. >> this is a serious comment >> sri, come on. you are saying taxpayers stand in front of taxpayers? s >> did you know if you are

holding long duration bonds and you lose money -- that is a basic principal of finance, steve. that is what we are talking about. >> don't get personal here, sri. that is not right. you know i know that what you said earlier is also untrue, sri. what has happened now is the duration risk has been removed that's the key that's what this one-year fund is >> removed for the bank. >> that's what we're talking about. you said there is duration risk from the banking point of view >> i understand his point. >> you have duration risk. it is not svb. it is not signature bank the whole financial system in the last year has seen the holdings of long dated treasury yields fall. they have not marked them down to market. they eventually will have to be

bailed out that is the fact >> you are right >> that is not yet recognized. you will have more bailouts. >> my point is, for a year, the fed's job is to remove the risk. take any paper no matter what the market val -- let me finish this, andrew no matter what the market value and put to the fed at 100. he is right. it will exist. you are not removing it, but it is off for a year. >> sri, you said there will be more bank failures or bailouts we are trying to wonder if that will happen or not that is the fundamental question has the government or federal reserve and measures put in place this morning stop not just this run in this moment, but stopped any future contagion have they not just bought themselves a year or within the

context of the year, what will happen new regulations in place new capital requirements for the banks? mergers? are those rules going to force the banks to fail? is that inflationary they are not lending at the same rate they have to lend at higher rates? what does that do for the economy? your failure point, i'm curious, will happen as it leads to the failure right now? >> the failure, andrew, are two things your point is a good one in saying if you are in the middle of the country, lending to farmers, you will not be bailed out. as the tech sector made the reason that it is very important. you cannot make payroll next week unless the deposits are released you will have other sectors make a similar argument you don't have to be in the middle of the country making farming loans. you can make other reasons why

you are a critical part of the financial system that, i think, will cause more losses to come in the future >> who will fail, sri? more bailouts. why? one of the things that should be great about a guarantee, it should cost you nothing because hopefully nothing happens. that's the point of the guarantee. >> the guarantee, in this case, you are talking about a universal guarantee just as we have a universal guarantee of deposits it is not just $250,000 maximum. any amount for the critical bank is guaranteed. if you are saying that, yes. there will not be losses or more runs on the banks. you will have enormous risk taking because uncle sam will back you up every single time. >> all right that's the scary part. we will get deeper into the questions for the bond and stockholders

deeper into questions. sri, we have to run. thank you very much for joining us. >> thank you, becky. the conversation continues containing the svb contagion the companies with growing exposure to the bank those stocks under pressure. we layout the names next and check out the early s&p 500 winners and losers "squawk box" returning in just a moment (vo) with verizon, you can now get a private 5g network. so you can do more than connect your business, you can make it even smarter. now ports can know where every piece of cargo is. and where it's going. (dock worker) right on time. (vo) robots can predict breakdowns and order their own replacement parts. (foreman) nice work. (vo) and retailers can get ahead of the fashion trend of the day with a new line tomorrow.

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you. >> the reason, andrew, we are watching this closely is if you noticed on the bottom of the screen, we went from des decent solid gains and the dow was down 140 points i want to show you in the last 15 or 20 minutes where we have seen the downturn in the s&p and dow. it has to do with not the shock

here, but the s&p and dow. if you look at the pre-marketk % jpmorgan chase is down .75%. citi is down 2.5%. they are not the only ones if you look at the other banks in the pre-market trade. morgan stanley and wells fargo and goldman sachs. not surprising it is the price action in the last 10 or 15 minutes which caused the downturn. check out the pre-market intraday chart for jpmorgan chase and bank of america or citi if you look at the pre-market boards and in just the last 10 or 15 minutes, we have seen a more market down turn from 1% to 2% downside in the last five minutes in the charts. look at those as the indicator, if you will. keep an eye on the other regional banks at the heart of

the downturn we have seen outside of silicon valley bank we talked about the west coast banks which have been hit hard we're seeing that play out again this morning look at first republic the epicenter of the ripple effect outside of silicon valley bank pacific west pac west 29%. western alliance down 17 in the last three days, on friday, each of these three banks came out with updated financials, if you will, just to reassure investors of capital position it doesn't seem to alleviate the pressure if you watch what is happening right now, put it in perspective how much the regional banks have under performed the broader financial sector that is key. if you look at the regional bank etfs over the financials overall, you will see the regional banks have been under

performing not just because of the interest rate dynamics, but what has happened. andrew, becky, steve, the point here is it doesn't seem as though for right now we are seeing, at least, that alleviation coming from the government some of these at the epicenter, andrew >> dom, a couple of the banks you are indicating that are and have been over the weekend, i don't want to say on the block, but on the block which is to say lots of folks figuring out mergers and other things to happen those mergers may still happen to the smaller firms the separate issue which is over the next year, you have to imagine that regulators will start looking at smaller banks changing the threshold of what it means to be systemically important. we are deemed almost every bank

in america is systemically important. every banker may be working for the government, if you will. it is now going to be more expensive to make loans? they stopped making corporate loans and lots of things because they thought it wasn't a great business that business moved to the smaller banks. now the smaller banks will have a hard time. >> wells fargo >> absolutely, becky what you have in essence done in this scenario is demonstrate that the banking -- operating a bank in america is more expensive. you will not see that necessarily right off the bat from the consumer perspective or depositor perspective -- what you have done, because this is not a taxpayer funded bailout, but you assessed every bank in america higher costs to make up for some of the shortfalls we will see if that is the long-term case,

you elevated the cost of doing business for many of the banks in america so, what you have gone and done is maybe perhaps, andrew, to your point, forced consolidation to keep the banking operations in place that is key, right whether or not those banks can operate any more and maybe jpmorgan chase and bank of america and citi can do the job they have done over the course over the last several years. >> we hope that is not the case. if we all move to just big banks and that is the point of what the government tried to do last night. keep your money where it is. >> absolutely right. >> the question is what happens over the next year >> what you have gdone as the government is a ththe banking sm in middle the america is safe. you want to keep the concentration of power away. goldman sachs and jpmorgan chase

have such an influence over the banking system what you want to do is balance it a bit this is the whole point of government doing what it has done. >> dom, thank you. we will be back with you throughout the morning i warrnt to get to frank holland who is tracking the names with the sizable funds stashed in silicon valley bank which seem to be at risk. >> andrew, we are looking at docusign signed with silicon valley bank to agree to holdprimary operating and securities accounts with the bank you see shares moving higher in the pre-market on the backstop deal others with agreements a.i. lending platform. a medical device maker and most of them moving higher on the news in tech, one seeing the most immediate impact out of negative sentiment is etsy. sellers saw payments impacted. roblox with no day-to-day

impact and unity software with a small amount of cash with silicon valley bank. we are seeing pharma names trading lower. oncorus. and you see them right now it disclosed 25% of cash in silicon valley bank. other names in the space is ginkgo with no movement so far back to you. >> frank, thank you very much. see you later. we have much more on the fallout from this weekend's events to protect depositors of silicon valley bank and signature bank take a look at the futures right now. the dow futures have turned negative down 115 points. of course, this comes after a loss on the dow last week of 4.4% s&p was down 4% last week. both of those futures are in positive territory s&p up 3 points. nasdaq indicated up 68

quick check on the european markets which are all lower at this hour. concerns about what they will do in europe and whether they will have the same sort of funding line that is extended here by the federal reserve. you see here the cac 40 is down 2.5% spain, ibex, off 3.6%. ftse mib is off 4.3% dax in germany off 2.75% "squawk box" will be right back. and your family first. i promise to serve, not sell. i promise our relationship will be one of partnership and trust. i am a fiduciary, not just some of the time, but all of the time. charles schwab is proud to support the independent financial advisors who are passionately dedicated to helping people achieve their financial goals. visit findyourindependentadvisor.com

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welcome back to the extended special edition of "squawk box." good to see everybody this morning. obviously, with silicon valley bank going down and there have been questions for what it means for vcs and startups joining us to talk about it is alex hartstruck. alex, you are here in town we are lucky to have you here. you have been dealing with this the last 72 hours or more. as a vc and your companies struggling, what is the mood >> thanks for having me back on the show the mood up until now has been

somber i have been very impressed with the government's response so far. i think the statement that came out with the fdic has covered all manner of issues that could arise not only with the deposits at silicon valley bank, but a number of external problems that could potentially occur that haven't happened yet that is a great degree of confidence of the ecosystem that everything will be okay. >> what problems what are you talking about >> in the course of the announcement coming out, signature bank collapsed you have a flight of deposits away from small regional banks people flying toward larger banks. really have a comment on whether or not that is right or wrong way to go about this, but the core issue doesn't fall in the banking system it doesn't fall on the depositors or creditors with the banking system the government signalled these companies are safe.

>> andrew made the point that this happened and considered contagion if it were a bank in the midwest and farmers losing money? >> i've gotten a lot of questions about the name of the bank in question which is silicon valley bank. the important thing to note is silicon valley bank doesn't just bank for silicon valley. it indexes on startups that serve a lot of critical infrastructure everything from clean tech, deep tech, in the case of my firm, defense tech these are firms that are doing really critical things for all of the united states spread across the evenntirety of the united states. >> i have a semi political question for you so many of the folks in silicon valley, not all, but a vocal contingent of true libertarians

in sellilicon valley called for less regulation. we have vcs who say, you know what carried interest on taxes, we s shouldn't have to pay that because we're special and we help startups. we are a unique breed of people. does the vc community say i'll be humble and say thank you. maybe rethink what the approach is around what just happened maybe it wasn't a 2008 bailout, but guess what happens it is now happening and somebody came to the rescue and somebody has to pay for it. >> those are all very fair issues what i would say is i think what people have been saying consistently is calm down, calm down, calm down.

anyone in a relationship for longer than 24 hours knows the one thing you don't tell your significant other is to calm down unless you want everybody to freak out i think the ecosystem has been taking that tact a lot instead, we should look at the positives. the government stepped up. the government stepped up in a way that covers all manner of sins the people affected here are going to be a lot of things coming out from the investigation. we can depend on that and a lot of finger pointing depositors, nothing other than innovative small usinesses, ar safe that is important. they did nothing more than put their money into a bank and they want that money to be safe everyone else to be blamed is the discussion around the table. >> if it rains, people are supposed to run businesses so if it rains, you can still operate if it rains. it is not supposed to be sunny

all the time you are supposed to build the business so it works when it rains. clearly, the smartest guys in the room, part of the vc and silicon valley community, made a dire mistake themselves in terms of the bank they choose to do business with and how much money they chose to keep at that bank. this is a huge moral hazard question the smartest guys in the room should keep an eye on it i know where my money is and i layered it all over for lots of reasons and hope it will be safe i never expect if a bank goes out of business, i would be bailed out just saying. we all lived through 2008. we reported on this. we wrote the book. this does happen >> not every small business will be a sophisticated as you, andrew >> most of them were told to put

their money there by vcs who should know. >> that is a fair criticism. you will see a lot of different banking practices in the future. that being said, the depositors did not take risk outside of using the bank that everybody uses that they felt was safe depositors should be safe. silicon valley bank is not safe. silicon valley bank will cease to exist the people we depend on which is the critical infrastructure of people building innovative startups in america are safe >> that's very good news. >> in terms of what people were thinking, we heard a lot about predatory lending taking place with startups in a crunch. what was behind the scene? >> this is important to note and this is why it pays to keep a level head which is in times of uncertainty, especially in an international environment like now. we have russia invading ukraine.

china right out sside of taiwan licking its chops there. these are the same people looking at small businesses serving american critical infrastructure and saying this is an opportunity to take a shot at the united states that is why the government position is important. >> we will come in and giver you f -- give you funding and we want to see what you are working on >> for defense companies you come in and say the market says you are worth this. i think you are worth this all i want is information rights if what you are dealing with is bankruptcy because you can't meet payroll and no one in the government is helping you, then you don't look at the flag on the life raft when you need it >> i don't think this would have happened if it weren't for the concern this would be systemic and other regional banks would go under i don't think the silicon valley bank is what saved the depositors

that is what the california politicians were calling for nobody else was saying that. if this was a situation that the treasury looked at it and did not think it would be systemic and go to other regional banks, you would not have this package put together >> i think that is an opinion. i'm not the best person to comment on however, the most negative part about this is i do feel there is going to be an err of sentiment that people can't trust smaller banks. at least in the beginning. less excitement toward that. i don't think that is fair i think it is not fair to say these issues were something that everybody should have ant anticipated in advance because of practices i had sin krat i-- i'd yoe idiosyncratically. >> alex, thank you.

bank stocks trading lower after silicon valley bank collapse check out kbe falling. joining us with more on this is r.j. grant at rbw. and simon johnson is here. former chief economists at the imf. co-chair of the systemic risk council. i'm going to simon first, in part, because we have not spoken for so long. do you think this is the beginning or the end of the crisis steve liesman asked is this bear sterns or lehmans? where are we in the story? >> that's a great question, andrew i think this is the middle of the end. i think it is september or october where the government puts its act together. they put out a good package. they could end it today, for example, by extending deposit

insurance and assessing appropriate premiums they are close >> you think they will have to do that to prevent the flight of capital from the smaller banks >> i think that is the question of the day not to prevent the flight from the small banks. they stabilized them quite well. i think there are other concerns of the financial sector that could be dealt with effectively. they have created an implicit and effective guarantee behind uninsured deposits that's what they did for silicon valley bank and signature. and doing it for signature, andrew, was the most important thing they did yesterday if anyone else is in trouble, we will do this you need to get ahead of this, andrew you need to remove the doubt. >> here is the latest. barney frank on the board of signature. think about that for a moment.

r.j., curious where you think the bank stocks go they moved a little bit to the better at this moment. long term, the smaller banks, i imagine will have tougher times if they become systemically important. i imagine there are higher capital requirements and costs of loans will go up and that is not good for them or not good for the economy. r.j., can you hear me? i think r.j. cannot hear me. >> he can hear you he was talking we cannot hear him this is another situation where we can't hear. >> i apologize to r.j. the audience can hear you. i can't hear you >> good morning. >> we will wrap it up and come back to you in the next couple days, if not this morning. r.j. and simon, thank you. when we come back, president

biden speaking at 8:00 a.m. on the banking system we will have that live this the weekend events put the rate hike path on hold former dallas fed president richard fisher is joining us we have a big show three hours to go. stay with us of the -- stay with us and at chevron, we're working to help reduce the carbon intensity of the fuels that keep things moving. today, we're producing renewable diesel that can be used in existing diesel tanks. and we're committed to increasing our renewable fuels production. because as we work toward a lower carbon future, it's only human to keep moving forward.

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if your business kept on employees through the pandemic, getrefunds.com can see if it may qualify for a payroll tax refund of up to $26,000 per employee. all it takes is eight minutes to get started. then work with professionals to assist your business with its forms and submit the application. go to getrefunds.com to learn more. good morning a wild weekend in the banking sector following the collapse of silicon valley bank. federal regulators stepping in to guarantee deposits and stop contagion. we dig into the story with reporters in new york and washington and silicon valley. we will talk to a former fed official goldman sachs expect the central bank to halt rate hikes at the next meeting. stock futures were higher and now tumbling for the dow

futures. we with wil now tumbling for the dow futures. we withl show you what is movin now. it is monday, march 13th, 2023 "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc we are live at the nasdaq market site in times square after what was a wild weekend, we have so much news to bring you i'm andrew ross sorkin along with becky quick joe is off steve liesman is at the table with us. here is what you need to know. federal regulators sweeping in to guarantee deposits of the customers of silicon valley bank i just got an email from somebody in silicon valley who went to an atm at the silicon valley bank and could not access it yet let's hope