old saying goes when the u. s. sneezes, the rest of the world catches a cold, and that might be clickable once again, to the global financial system. after 3 american banks collapse in the span of one week seized by the federal government. after some how to run on deposits. silicon valley bank in guest at northern california signature bank in manhattan and silver gate bank in san diego, california. all collapsed. then within days, the announcement of 1st republic bank also a california based bank getting a cash infusion from bigger banks in an effort to stem the domino effect of banks getting shuttered. all these so called regional banks waiting into the uncertain world a fintech in venture capital. however, and international name in banking now facing colossal collapse with their balance sheets far greater than all those other banks. combined, credit suisse with hundreds of global offices, divisions,

and every sector of the economy. this combination, consumer investment bank has been roiled in controversy from their london offices to shanghai. so for more on this global banking crisis, we are joined by a former credit suisse banker. david, how will he's now be president of pro chain capital. he's a hedge fund manager with expertise in crypto venture capital, and he's also an attorney. so dave, thanks for joining us. credit suisse is a 166 year old company. it's literally an institution in and of itself. first. how has a bank managed to survive and thrive all of these decades up until this point? through all the global economic turmoil, i mean i'm talking world war, the great depression, regional conflicts. how have they survived? what made their business model of banking able to withstand all of these external

forces? certainly, i wasn't at credit suisse all those decades ago, but i think, you know, it started out as a national bank, not that it was not owned by the nation, but it certainly was swiss centric to begin with. and then in light of the fact that tax avoidance. ready was used by many around the world through switchback counts. certainly credit suisse was able to go ahead and capitalize on that. when that was invoke. in addition, over time, the bank expanded far beyond switzerland, with branches, frankly, all over the world. and certainly very large presence in all major financial capital's around the world. and it was able to have functions far beyond just deposits and lending, but also very meaningful investment banking activities and wealth management as

well in terms of being able to weather recent crises. i don't think the bank particularly whether them well. ready it's stock price has been hurt, certainly. ready over the last 10 to 20 years, we've seen it a road and the, the largest shareholders of the company have been from the middle east. and they saw some opportunities in the bank. but i think with all that went away with respect to tax avoidance. ready and the panama papers, i think a large part of the business has gone away as that is that it's never going to return. and as you said, the company has a very well known franchise, but it certainly is fighting very harsh competition in, in other investment banks. so that's where the,

the bank sees itself and find itself. all right, so a lot of nerves are rattled right now in the banking industry on both sides, both customers and bankers. people on both sides of this. obviously, credit suisse is a multinational organization, though they're getting an infusion from the swiss central bank. is that going to be enough to quell global fears about whether or not their deposits are safe in these dozens of countries that credit suisse operates out of? so i'm going to touch on one of the words that you use, which is fears. i think it quelled the panic, but i don't think it has quelled the fears. and what i think the infusion and the support from swiss national bank does for credit suisse. ready it allows the bank to kind of get right size, shrink with deposits, leaving by those who are fearful over time,

but not in one fell swoop in a panic. in a panic, it would be very messy. it would be destructive to the bank and to deposit or is customers of the bank more generally. and i think certainly that's what the swiss banking authority wanted to go ahead and provide, provide some breathing room to go ahead and assess the options for the day for the swiss begging authorities to go ahead and get the bank to a new place which is clearly at the very least, the smaller bank potentially get merged into another bank. there's been. ready about a merger with u. b. s, which is another switch bank or potential nationalization, or may or may be rescued by another financial institution that nots was. so it gives a bunch of breathing room. it goes to having quells panic and you know, we will. ready way over the next weeks and months to see where credit suisse is going to go. yes,

certainly an important distinction in the industry there between panic and fear. so in the us to one of 2023, we saw 3 regional banks collapse. the feds have taken over and then shuddered as to the be signature bank and silver gate. lawmakers and people like treasury secretary, janet yellen tell americans that our banking system is safe. that these are isolated incidents. but dave, 3 banks in the span of one week on its face means they are not isolated events. then a week later, this banking giant credit suisse. so a few things here, if you can address for our international audience, these so called regional banks, s v b, signature and silver gate. they've got an international component to their business models as well. get into that for us. and why did us regulators allow these banks to fail? whereas in credit suisse case, the e. c, be prevented them from folding. so it's

a lot to digest and respond to manila. but certainly all important question with respect to the regional banks, there reaches beyond the united states. i think mostly we're talking about silicon valley bank. we're s p b and silver gate. s b is the cornerstone of the venture capital community. and although the venture capital capital largely comes from us, venture capital managers or venture capital funds, their investors in terms of venture capital funds, get their money from lots of different places all across the world. sovereign wealth funds, you know, in various countries, foundations high net worth. ready individuals and so forth. and then the other thing which i think is more public, is the fact that the ventures themselves that those venture capital funds invest in are located in all different places around the world. and technology hub around the

world has venture capital driven investments there. and those venture capital investments may have very well banked at silicon valley bank. so valley bank didn't only have branches here in the united states. they had branch branches around the world as well, particularly the u. k. has been, has been highlight. so that's, that's with respect to silicon valley solar gate, little bit different silver gate was largely tied to crypto. and the crypto community, you know, is a worldwide community and very much interconnected in the way that they hold hold crypto goes ahead and connect them. but the other thing is that they're, they're having there aren't very many. and now there are even less crypt friendly banks in the united states are taking down. silver gate certainly goes ahead and

has its tentacles, which, which their tentacles, you know, are, or throughout the world through the crypto. certainly there's reparations throughout the world. and then lastly with respect to credit suisse, we're talking about. ready to a different animal, i think it's just it's, it's a, it's coincidence of timing, that credit suisse is coming under massive pressure at same time as these regional bags. i mean, granted, it's not coincidence in the sense that people are scared about their deposits. because of what happened to the fail in the failure of std. so gate and signature that people start to get concerned around for at least for credit suisse. that's been floundering for a number of years now. and there have been questions around crates, research ability to continue, they've had leadership changes, they've had a raft of scandals. and they've been skating on thin ice sort of se, offer a long time. now, this is just exacerbated the situation, but in terms of what the u. c, b is going to do, right,

really related to credit suisse crises is a much, much larger institution by magnitudes of, you know, a couple times greater than these regional banks. and like i said earlier, crates, reese's reach is substantial around the world. it's not that they just have branches in other places, they have actual offices that employ hundreds of people, if not thousands of people in cities like new york and london and shanghai and in singapore and so on. so i think it's, it's a much bigger. ready situation that could, if it did devolve, could go ahead and effect other large investment banks around the world. and i think that the e. c, b would not want that. and coming up next, crypto has disrupted the financial industry all over the world in ways modern

banking has never before seen. but could these coins spell ruin for institutions like credit suisse? that's what one us lawmaker asserts. we'll discuss it when we return with david tar . will sit tight, the emma will be right back. i ah, ah, ah

ah, ah, with by the middle of the 19th century, practically the whole of india had been under the rule of the british empire. the colonial authorities had imposed that heavy death bringing the people into poverty and were exporting natural resources. and moreover, these authorities absolutely had no consideration for the provisions of the local population, treating them like 2nd class citizens. the british were showing signs of disrespect even to those who cooperated with them. the fact of ignoring the religious beliefs of the hindus led to the mutiny of the z boys, mercenary soldiers serving under the british crown. 3000000000 began on the 10th of

may 1857 in the garrison town of may river, north of india. in the form of a mutiny. the rebels quickly took over daily. the heroic resistance of the indian people lasted for one and a half years. however, the forces were not equal to the colonial authorities dealt with the rebels cruelly thine slaves. the boys were tied to the mouth of the cannon and were shot right through their bodies for the amusement of the public. this type of execution was called the devil's with the obliteration of the mutiny resulted in the death of 800000 inhabitants of india. however, the british empire never broke the free spirit of the indians and their will for resistance with welcome back to the m. o, i'm manilla chance. the rise of crypto in the past decade could be the creative

destruction. joseph shoe peter, one of the leading 19th century economists for told not since the creation of money itself has something disrupted, how we view value and wealth. dave, how well president of pro chain capital and crypto expert is back with us to discuss? so dave, let's get into your wheel house here. crypto. you are a hedge fund guy. you co founded pro chain capital signature bank in manhattan, a, a large portion of their assets under management come from crypto. now you've told me before in the past that signature, however, is actually best known for it's new york city real estate division. so did crypto ultimately add value to the banks net portfolios, or did it disrupt the business model a little too much, especially given that long time you now retired congressman from boston. barney frank, whose signature legislation, the pun intended, there was the dodd frank act after the 2008 financial crisis that was meant to

scrutinize financial institutions. barney frank sat on the board of signature bank the last few years. up until it folded, he actually took a veiled swipe at crypto recently saying that when dodd frank was an acted crypto didn't exist. so is he implying that crypto is what brought down signature bank? so there was a lengthy interview done with barney frank recently about the downfall a secretary. and he really can't say a lot at this point because signature being closed was really is the only instance thus far. now that we've had lots of banking failures in the united states was the 1st time a bank has been shut down for no proof of insolvency. so in fact, signature wasn't at least as far as the fed, the ledge was not installed. and so what was the purpose of, of closing them,

the risk that they pro posed and what particular risk did they close? well, they were a very big, as you said, to the, to the crypto sector. their exposure to the crypto sector though, was, 1st of all, wasn't the, the, it wasn't the majority of their bank, i think was 25 percent of deposits. and then secondly, what they did for crypto firms, and by the way, my firm banked with signature at the outset of our fund. thankfully we moved away from signature. and i said thankfully, only because we weren't quite in the morass of the past week or so. we moved away from them about a year ago. not for any particular you know, suspicious reason which wanted to be with a more, i'd say less, less out of the line like bank. but nevertheless, signature bank, you know, wasn't doing anything on with respect to crypto. they had no investment in crypto,

they simply took deposits from crypto funds and they help those crypto funds taken investments. and then go ahead and use that money. those funds will go ahead and use that money by crypto, but the crypto wasn't held it signature. they was held that crypto custodians or crypto exchanges. so signature really didn't do much by way of, you know, supporting the crypto world for the fact that bank those enterprises. but it seems that the feds had been cracking down and there's this monica going around of choke point 2 point oh, meaning the federal government is trying to choke the crypto ecosystem from any sort of greek breasts. one of those breasts that it needs to take is having money move. you can't get cash or us dollars into crypto. ready without a back in the middle. and so the defense sent

a very serious message to banks around the country. you know, they better be aware of being involved or helping aiding a betting the crypto ecosystem. and it's really unfortunate because there's not a criminal, per se, about helping crypto investment firms, crypto investment firms are not operating illegally. you know, the question is still out whether they are buying crypto currencies that are securities and therefore need to be registered. and maybe that in itself is illegal, but that's a monetary part of the thought of this. you know, folks are doing something that is violate of, of the law that there is consensus on. it's still out in terms of, you know, decision be made either by our courts or bar congress in terms of whether crypto is a security or not. but it's not as if it's some elicit transaction that's going on . and so, yes, barney frank did say, did indicate that it had

a lot to do with crypto. barney frank, i think, is distancing himself from crypto, generally because he was never a cheerleader for crypto anyway. and frankly doesn't have a lot to gain by being a cheerleader for crypto. so he's sticking to his story. but in terms of what the federal government has done, it has sent a very serious message to the crypto community and certainly crypto banks. that being said, one last point on this is that crypto has risen in value massively . well over 20 percent at this point. since this crack now on signature bank started or some silver gate started showing the resiliency of crypto currency. and frankly, maybe some people would rather have their money and crypto where they can go ahead and take care of it at all times. and, you know, be able to transact that at all times, rather than having it in

a bank. and potentially being at risk of the government shutdown of the bank sound like a warning shot, the government made their by shuddering signature and silver gate. then so us lawmakers often criticize crypto saying things like it's the darkest of dark money or that drug dealers, an unsavory type for, use it to fund elicit activities. they're floating the idea of course of the digital dollar to totally different concepts obviously. but then going back to credit suisse, we're talking cash money with them, in their case, the swiss franc, but cold hard cash can be traced back to many so called nefarious types from around the world. i'm not going to go into too much detail about the, the names that stem from all over the world, venezuela, egypt, here in the u. s. so many other places because i have not been able to independently verify the validity of these account holders. but credit suisse is

believed to have had some $8000000000.00 in shady assets from these alleged nefarious types. credit suisse is being accused of in effect, money laundering for war lords and drug dealers and so forth. so whether it's crypto or cash, is there any real way to regulate against shady cash or questionable monetary instruments? certainly not. there will always be a way for bad actors to go ahead and use value in order to go ahead and transact as a matter of fact. and this is one of the things that i think the public has heard wrong is that when it comes to crypto crypto is identifiable, that there is an address that is assigned to every account to every crypt or transaction. and so you can go ahead and attach an address to a human being and it can be traced. and that's why we've seen

a bunch of situations where crypto was used either in terms of rand, some or in terms of, you know, other activity to support and otherwise criminal transaction of, let's say drug trade. they've been able to trace those, those, those crypt, those and in fact get them back as crypt currencies, excuse me, and get them back for the benefit of the original owners in the cases of theft. and in contrast, cash hard cash like greenbacks, right? can't be traced, that all, unless somebody goes ahead and, you know, uses a certain serial number and deposited deposits in certain bank. so in fact, crypto is better for fighting crime than cold, hard cash in terms of bank accounts. certainly there are ways to go ahead and track your account. ready folders and what they do and where they transfer and so on and

so forth. and yeah, you know, i'll go step further than you and say, certainly chris, we have supported whether knowingly or unknowingly. let's leave that out for a 2nd criminals. and so how other banks certainly, and they've been tagged and you know, they, sometimes they pay fines, and that's all that really ever happens. that no one ever gets carted off to jail. from one of these banks for having supported one of those types of schemes even know equally certainly it's usually a fine that is, that is large onto the financial institution. so no matter what your goal is, always going to have bad actors. you're going to have people that facilitate those bad actors. and it's a question of, you know, i think with respect to crypto currency, it's actually one of the best medium to go ahead and track people and track accounts. and so therefore being able to identify that actors to those who facilitate those bad actors. in contrast to what has been said from those on the

very far left like elizabeth warren, or it will go into that for us. what about elizabeth warren? oh, elizabeth warren. so little bit warren comes for a place that's near during my heart, which is bankruptcy law. that's what she was. she was a professor bankruptcy lot, harvard before becoming a sen. well, but she didn't focus when practicing bankruptcy law, i focused on the bankruptcy of corporations of business. she, her focus was personal. bankruptcy which is i'd say, you know, although very sympathetic. ah, sometimes this is the more when it comes to the, the importance of bankruptcy law. but since she's been a senator, she has been a, by her own admission. a champion of i'd say, you know, lower and middle class. she thinks that all institutions,

financial and otherwise are out to rob. so is those, those individuals in some way whether rob them financially or robbed and opportunity in life or rob them, you know, of paying more taxes than then you know, wealthier or more successful people. ready and this has been our position as a matter of fact to go back to earlier question that we discussed regarding silver k, sarah warren, pendle public. and the letter is public regarding silver gate throwing a lot of doubts out publicly regarding the stability of the bank and many in congress and many pundits that fall, congress felt that that was incredibly out of line. because you could argue that senator warren actually was the straw that broke the camel's back,

started to run on the bank. started everybody thinking about, well, maybe we should go ahead and shut this bank down. and for congress to go ahead and pick winners and losers, i think is very, very wrong. although, you know, congressional appoint, these are known to go ahead and invest their personal money. and this is a whole other conversation in stocks that they know are getting favorable. trained in stock to companies that they are getting federal treatment on the hill. this is really stuff too far. ah, where you go ahead and use your pulp it to call out a particular institution. it's one thing to go ahead and call up the department of justice or the f b i c, and maybe give them a tip or tell them, you know, go ahead and own their focus on a particular institution. but the, call it out publicly in a letter that everybody is going to read and not necessarily be supported by fact bunch of, you know, the, the statements and the letter where questions are day,

you know, on financial, on financially solid grounds on it just so just out in the public and that's incredibly, incredibly appropriate. i think, you know, she should be called out very loudly for what, for what she did. you know the case of silver gate which may very, how very well have started the daisy chain of what we now see in the cases of signature in the case. so con, dolly bank, so on david tower, president of pro chain capital. unfortunately, i am out of time, so we'll have to leave it right there. thank you so much, dave. thank you for having the manila and that is going to do it for today's episode of modus operandi. the show that digs deep into foreign policy and current affairs. i'm your house, manila chan. thank you for tuning in. we'll see you again next time to figure out the ammo. ah

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