Silicon Valley Bank Fails – FDIC to Cover Up to $250k in Deposits

On Friday, March 12th, 2023, Silicon Valley Bank (SVB) became the second-largest bank failure in U.S. history.[0] The bank, which had been a fixture in the venture capital space for decades, was shut down by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver.[1]

The FDIC will cover up to $250,000 per depositor and may be able to begin paying those depositors as early as Monday.[2] The majority of SVB’s customers were businesses that had large amounts of money stored without insurance, which caused alarm about how to recover the remaining funds.[2]

The proxy statement filed by SVB recently disclosed that the bank’s Chief Risk Officer departed their post in the early part of 2020, and a new one was not hired until January 2021.[3] The timing of these events suggests a lack of oversight in the bank’s operations, which may have contributed to the bank’s sudden failure.

Treasury Secretary Janet Yellen has ruled out a federal bailout for Silicon Valley Bank’s investors, but said financial regulators are “concerned” about the impact to depositors and working to address their needs.[4] The FDIC is offering all insured depositors full access to their funds by Monday, and will be providing an advance dividend to those with uninsured deposits within the next week.[5]

The collapse of SVB has been a shock to the financial markets and the tech industry, as the bank was a major lender to the sector, with clients such as Airbnb, Stripe and Coinbase. SVB was founded in 1983 and had $210 billion in assets, but faced liquidity problems due to its exposure to risky loans and investments.[6]

On Thursday, after SVB had sold off its fixed-income portfolio worth $21 billion, its share price crashed due to the announcement of a $1.8 billion loss.[7] SVB paid about $120 billion for debt securities on its balance sheet, but those securities had a current market value of only $102 billion as of December 31, 2022.[8]

The FDIC is selling off the bank’s assets to pay back its customers, including depositors and creditors.

0. “Takeaways from America’s second-largest bank failure” CNN, 11 Mar. 2023,

1. “Here’s how much of your bank deposits are FDIC protected” The Washington Post, 11 Mar. 2023,

2. “Treasury Secretary Janet Yellen says U.S. government won’t bail out Silicon Valley Bank” CNBC, 12 Mar. 2023,

3. “Silicon Valley Bank had no official chief risk officer for 8 months while the VC market was spiraling” Fortune, 10 Mar. 2023,

4. “Yellen rules out bailout for Silicon Valley Bank: “We’re not going to do that again”” CBS News, 12 Mar. 2023,

5. “PR-16-2023 3/10/2023” FDIC, 10 Mar. 2023,

6. “Silicon Valley Bank – The Aftermath. Which Companies Were Impacted?” TipRanks, 12 Mar. 2023,

7. “SVB Collapse Has Short Sellers Making $500M, Now they Have to Collect” Bloomberg, 10 Mar. 2023,

8. “‘This hit like a ton of bricks’: Troubles at Silicon Valley Bank ripple across Boston tech scene” The Boston Globe, 10 Mar. 2023,