{"id":1954,"date":"2023-03-10T20:02:50","date_gmt":"2023-03-11T01:02:50","guid":{"rendered":"https:\/\/embarrdowns.com\/fdic-assumes-control-of-silicon-valley-bank-after-largest-bank-failure-since-2008\/"},"modified":"2023-03-10T20:02:51","modified_gmt":"2023-03-11T01:02:51","slug":"fdic-assumes-control-of-silicon-valley-bank-after-largest-bank-failure-since-2008","status":"publish","type":"post","link":"https:\/\/embarrdowns.com\/fdic-assumes-control-of-silicon-valley-bank-after-largest-bank-failure-since-2008\/","title":{"rendered":"FDIC Assumes Control of Silicon Valley Bank After Largest Bank Failure Since 2008"},"content":{"rendered":"

On Friday, the California Department of Financial Protection and Innovation shut down Silicon Valley Bank (SVB) as tech startups pulled out their deposits.[0]<\/a><\/sup> The US Federal Deposit Insurance Corporation (FDIC) assumed control of the bank and put a freeze on withdrawals.[1]<\/a><\/sup> This marks the largest bank failure since the 2008 financial crisis and the second-largest in US history.[2]<\/a><\/sup><\/p>\n

The collapse of SVB began late Wednesday when it announced a $21 billion securities sale at a $1.8 billion loss and a plan to raise $2.25 billion.[3]<\/a><\/sup> In response, SVB Financial Group-owned bank’s share price tanked by over 60% to $106.04.[4]<\/a><\/sup> The company also cut its guidance and deposits dwindled with startups facing a funding drought and concerns about SVB’s loans to the tech industry.[5]<\/a><\/sup><\/p>\n

The FDIC set up the Deposit Insurance National Bank of Santa Clara to protect insured depositors, promising that these depositors would have access to their funds by Monday morning.[6]<\/a><\/sup> Uninsured depositors will receive an \u201cadvance dividend\u201d of unspecified size \u201cwithin the next week\u201d and future dividend payments may be made after the FDIC sells SVB\u2019s assets.[7]<\/a><\/sup><\/p>\n

The SVB collapse could have a domino effect on the rest of the banking sector, according to Pershing Square hedge fund boss Bill Ackman. He suggested a taxpayer bailout, implying SVB somehow provided a systemic risk to the US economy were it not rescued.[8]<\/a><\/sup> <\/p>\n

The Federal Deposit Insurance Corporation (FDIC) revealed that SVB had assets worth $209 billion and deposits totaling $175.4 billion when it was taken over.[9]<\/a><\/sup> However, more than 93% of SVB’s $161 billion in deposits were not insured, leaving it unclear what will happen to that money.[10]<\/a><\/sup> All insured depositors will have full access to their insured deposits no later than Monday morning.[3]<\/a><\/sup><\/p>\n

0. <\/span>“Silicon Valley Bank is being shut down today by regulators” TechCrunch, 10 Mar. 2023, https:\/\/techcrunch.com\/2023\/03\/10\/silicon-valley-bank-is-being-shut-down-today-by-regulators\/<\/a><\/a><\/p>\n

1. <\/span>“Troubles at Silicon Valley Bank ripple across Boston tech scene” The Boston Globe, 10 Mar. 2023, https:\/\/www.bostonglobe.com\/2023\/03\/10\/business\/troubles-silicon-valley-bank-ripple-across-boston-tech-scene<\/a><\/a><\/p>\n

2. <\/span>“Sizing Up Silicon Valley Bank’s $11B Real Estate Exposure” The Real Deal, 10 Mar. 2023, https:\/\/therealdeal.com\/sanfrancisco\/2023\/03\/10\/sizing-up-silicon-valley-banks-real-estate-exposure<\/a><\/a><\/p>\n

3. <\/span>“Companies scramble to meet payroll, pay bills after SVB’s swift failure” CNBC, 10 Mar. 2023, https:\/\/www.cnbc.com\/2023\/03\/10\/silicon-valley-bank-customers-scramble-to-meet-payroll-pay-bills.html<\/a><\/a><\/p>\n

4. <\/span>“Ackman calls on US government to consider Silicon Valley Bank bailout” Business Insider, 10 Mar. 2023, https:\/\/www.businessinsider.com\/silicon-valley-bank-bill-ackman-billionaire-government-bailout-svb-2023-3<\/a><\/a><\/p>\n

5. <\/span>“Dow Jones Futures Fall With Jobs Report Due After S&P 500 Sell-Off; SVB Financial Still Crashing | Investor’s Business …” Investor’s Business Daily, 10 Mar. 2023, https:\/\/www.investors.com\/market-trend\/stock-market-today\/dow-jones-futures-sp-500-breaks-support-as-svb-financial-slams-bank-stocks-jobs-report-due\/<\/a><\/a><\/p>\n

6. <\/span>“UPDATE: SVB failure triggers shockwaves across biotech industry” FierceBiotech, 10 Mar. 2023, https:\/\/www.fiercebiotech.com\/biotech\/biotech-bank-svbs-capital-crunch-sparks-bank-run-companies-huddle-consider-exposure<\/a><\/a><\/p>\n

7. <\/span>“How Silicon Valley Bank’s Failure Is Creating Total Chaos” New York Magazine, 10 Mar. 2023, https:\/\/nymag.com\/intelligencer\/2023\/03\/how-silicon-valley-banks-failure-is-creating-total-chaos.html<\/a><\/a><\/p>\n

8. <\/span>“SVB collapse highlights $620 billion hole lurking in banks\u2019 balance sheets” Fortune, 10 Mar. 2023, https:\/\/fortune.com\/2023\/03\/10\/svb-collapse-fdic-takeover-martin-gruenberg-620-billion-hole-banks-balance-sheet<\/a><\/a><\/p>\n

9. <\/span>“Tech CEO with millions in Silicon Valley Bank: ‘Innovation in the startup world is bleeding today'” Fox Business, 10 Mar. 2023, https:\/\/www.foxbusiness.com\/technology\/tech-ceo-millions-silicon-valley-bank-innovation-startup-world-bleeding-today<\/a><\/a><\/p>\n

10. <\/span>“What to know about Silicon Valley Bank and bank runs” Axios, 10 Mar. 2023, https:\/\/www.axios.com\/2023\/03\/10\/svb-bank-run-silicon-valley-bank<\/a><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

On Friday, the California Department of Financial Protection and Innovation shut down Silicon Valley Bank (SVB) as tech startups pulled out their deposits.[0]<\/a><\/sup> The US Federal Deposit Insurance Corporation (FDIC) assumed control of the bank and put a freeze on withdrawals.[1]<\/a><\/sup> This marks the largest bank failure since the 2008 financial crisis and the second-largest in US history.[2]<\/a><\/sup><\/p>\n

The collapse of SVB began late Wednesday when it announced a $21 billion securities sale at a $1.8 billion loss and a plan to raise $2.25 billion.[3]<\/a><\/sup> In response, SVB Financial Group-owned bank’s share price tanked by over 60% to $106.04.[4]<\/a><\/sup> The company also cut its guidance and deposits dwindled with startups facing a funding drought and concerns about SVB’s loans to the tech industry.[5]<\/a><\/sup><\/p>\n

The FDIC set up the Deposit Insurance National Bank of Santa Clara to protect insured depositors, promising that these depositors would have access to their funds by Monday morning.[6]<\/a><\/sup> Uninsured depositors will receive an \u201cadvance dividend\u201d of unspecified size \u201cwithin the next week\u201d and future dividend payments may be made after the FDIC sells SVB\u2019s assets.[7]<\/a><\/sup><\/p>\n

The SVB collapse could have a domino effect on the rest of the banking sector, according to Pershing Square hedge fund boss Bill Ackman. He suggested a taxpayer bailout, implying SVB somehow provided a systemic risk to the US economy were it not rescued.[8]<\/a><\/sup> <\/p>\n

The Federal Deposit Insurance Corporation (FDIC) revealed that SVB had assets worth $209 billion and deposits totaling $175.4 billion when it was taken over.[9]<\/a><\/sup> However, more than 93% of SVB’s $161 billion in deposits were not insured, leaving it unclear what will happen to that money.[10]<\/a><\/sup> All insured depositors will have full access to their insured deposits no later than Monday morning.[3]<\/a><\/sup><\/p>\n

0. <\/span>“Silicon Valley Bank is being shut down today by regulators” TechCrunch, 10 Mar. 2023, https:\/\/techcrunch.com\/2023\/03\/10\/silicon-valley-bank-is-being-shut-down-today-by-regulators\/<\/a><\/a><\/p>\n

1. <\/span>“Troubles at Silicon Valley Bank ripple across Boston tech scene” The Boston Globe, 10 Mar. 2023, https:\/\/www.bostonglobe.com\/2023\/03\/10\/business\/troubles-silicon-valley-bank-ripple-across-boston-tech-scene<\/a><\/a><\/p>\n

2. <\/span>“Sizing Up Silicon Valley Bank’s $11B Real Estate Exposure” The Real Deal, 10 Mar. 2023, https:\/\/therealdeal.com\/sanfrancisco\/2023\/03\/10\/sizing-up-silicon-valley-banks-real-estate-exposure<\/a><\/a><\/p>\n

3. <\/span>“Companies scramble to meet payroll, pay bills after SVB’s swift failure” CNBC, 10 Mar. 2023, https:\/\/www.cnbc.com\/2023\/03\/10\/silicon-valley-bank-customers-scramble-to-meet-payroll-pay-bills.html<\/a><\/a><\/p>\n

4. <\/span>“Ackman calls on US government to consider Silicon Valley Bank bailout” Business Insider, 10 Mar. 2023, https:\/\/www.businessinsider.com\/silicon-valley-bank-bill-ackman-billionaire-government-bailout-svb-2023-3<\/a><\/a><\/p>\n

5. <\/span>“Dow Jones Futures Fall With Jobs Report Due After S&P 500 Sell-Off; SVB Financial Still Crashing | Investor’s Business …” Investor’s Business Daily, 10 Mar. 2023, https:\/\/www.investors.com\/market-trend\/stock-market-today\/dow-jones-futures-sp-500-breaks-support-as-svb-financial-slams-bank-stocks-jobs-report-due\/<\/a><\/a><\/p>\n

6. <\/span>“UPDATE: SVB failure triggers shockwaves across biotech industry” FierceBiotech, 10 Mar. 2023, https:\/\/www.fiercebiotech.com\/biotech\/biotech-bank-svbs-capital-crunch-sparks-bank-run-companies-huddle-consider-exposure<\/a><\/a><\/p>\n

7. <\/span>“How Silicon Valley Bank’s Failure Is Creating Total Chaos” New York Magazine, 10 Mar. 2023, https:\/\/nymag.com\/intelligencer\/2023\/03\/how-silicon-valley-banks-failure-is-creating-total-chaos.html<\/a><\/a><\/p>\n

8. <\/span>“SVB collapse highlights $620 billion hole lurking in banks\u2019 balance sheets” Fortune, 10 Mar. 2023, https:\/\/fortune.com\/2023\/03\/10\/svb-collapse-fdic-takeover-martin-gruenberg-620-billion-hole-banks-balance-sheet<\/a><\/a><\/p>\n

9. <\/span>“Tech CEO with millions in Silicon Valley Bank: ‘Innovation in the startup world is bleeding today'” Fox Business, 10 Mar. 2023, https:\/\/www.foxbusiness.com\/technology\/tech-ceo-millions-silicon-valley-bank-innovation-startup-world-bleeding-today<\/a><\/a><\/p>\n

10. <\/span>“What to know about Silicon Valley Bank and bank runs” Axios, 10 Mar. 2023, https:\/\/www.axios.com\/2023\/03\/10\/svb-bank-run-silicon-valley-bank<\/a><\/a><\/p>\n","protected":false},"author":3,"featured_media":1953,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[47],"tags":[],"_links":{"self":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/posts\/1954"}],"collection":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/comments?post=1954"}],"version-history":[{"count":0,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/posts\/1954\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/media\/1953"}],"wp:attachment":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/media?parent=1954"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/categories?post=1954"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/tags?post=1954"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}