All deposits of the Silicon Valley Bank (SVB) have been transferred by the US Federal Deposit Insurance Corporation (FDIC) to a newly created bridge bank. All the depositors will have access to the bank and their money from the beginning of Monday morning, according to the financial regulator.
The FDIC in a statement expressed that all customers of the Silicon Valley Bank will automatically become the customers of the newly created bridge bank, which will hold “normal banking hours and activities, including online banking.”
The regulator has even tagged the former Fannie Mae head Tim Mayopoulos as the Chief Executive Officer (CEO) of the new bank, named Silicon Valley Bank N.A., it said.
“All depositors of the institution will be made whole,” FDIC said, adding that no bank losses would fall on U.S. taxpayers.
“These actions will protect depositors and preserve the value of the assets and operations of Silicon Valley Bank, which may improve recoveries for creditors and the DIF,” it added.
The action came after Silicon Valley Bank collapsed, following a run on its deposits, for which regulators and the White House aimed to keep up the confidence and faith in the banking sector.
According to data, the collapse of the Silicon Valley Bank is the biggest failure since the financial crisis of 2008. It has crippled stocks and triggered problems of contagion throughout international markets.
In a note to investors on Monday, Oppenheimer said that the tumble was likely to move deposits to bigger “safety” banks. Joe Biden, President of the United States will address the matter after 8 a.m (1200 GMT).
After contributing personal funds to startups that were potential victims of the SVB collapse, OpenAI CEO Sam Altman and well-known VC Vinod Khosla became the saviors of the firms.
With the exception of the federal reserve’s announcement on Monday that it will support the institution by letting people access their money, the survival of the bank and the extent of this assistance are still subject to discussion.
Both Altman and Khosla pleaded with angel investors on Twitter to give workers access to cash in times of need.
“Today is a good day to offer emergency cash to your startups that need it for payroll or whatever. no docs, no terms, just send money,” Altman tweeted, while Khosla said that large VC firms should step up, “especially those taking home millions in fees.”
The following claim was made by HSBC Holdings Plc on March 13, Silicon Valley Bank UK Limited (SVB UK), a UK ring-fenced subsidiary, was intended to be acquired by HSBC UK Bank plc for £1. As of March 10, 2023, SVB UK has around £6.7 billion worth of savings and £5.5 billion of loans outstanding.