West Virginia became the bearer of an unpleasant primacy. The first bank hit by the COVID-19 crisis had to close and end its operations in that US state. The report came from FDIC, which also mentioned the agreed sale of MVB. Is financial collapse coming, or are markets still able to recover?
West Virginia takes a sad primacy. The bank has to completely stop operations and its branches will soon take by the competitior. Fortunately, the financial collapse is still far away, but the acceleration of confirmed cases and deaths in the US is parabolic.
MVB bought the entire company and its assets for $ 1.9 billion. It was certainly not a small bank operating in the gray waters of the financial market. All branches are due to start operating again tomorrow, which means that the desperate effort to withdraw any remaining money from the bank will be avoided.
Americans have decided to take the banks by attack, which paradoxically many of them can lay. Banks are not simply prepared to withdraw money for 10% of their clients within a few weeks.
FDIC on Twitter issued a statement that closing the bank is not just the cause of the crisis:
This bank failure was not a result of the current health emergency. Financial issues were longstanding. This is very clear in our press release. https://t.co/4zefbHBAki— FDIC Gov (@FDICgov) April 3, 2020