{"id":2136,"date":"2023-03-12T13:02:29","date_gmt":"2023-03-12T18:02:29","guid":{"rendered":"https:\/\/embarrdowns.com\/silicon-valley-bank-fails-fdic-to-cover-up-to-250k-in-deposits\/"},"modified":"2023-03-12T13:02:29","modified_gmt":"2023-03-12T18:02:29","slug":"silicon-valley-bank-fails-fdic-to-cover-up-to-250k-in-deposits","status":"publish","type":"post","link":"https:\/\/embarrdowns.com\/silicon-valley-bank-fails-fdic-to-cover-up-to-250k-in-deposits\/","title":{"rendered":"Silicon Valley Bank Fails – FDIC to Cover Up to $250k in Deposits"},"content":{"rendered":"

On Friday, March 12th, 2023, Silicon Valley Bank (SVB) became the second-largest bank failure in U.S. history.[0]<\/a><\/sup> 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]<\/a><\/sup> <\/p>\n

The FDIC will cover up to $250,000 per depositor and may be able to begin paying those depositors as early as Monday.[2]<\/a><\/sup> 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]<\/a><\/sup><\/p>\n

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]<\/a><\/sup> 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.<\/p>\n

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]<\/a><\/sup> 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]<\/a><\/sup><\/p>\n

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]<\/a><\/sup><\/p>\n

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]<\/a><\/sup> 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]<\/a><\/sup> <\/p>\n

The FDIC is selling off the bank’s assets to pay back its customers, including depositors and creditors.<\/p>\n

0. <\/span>“Takeaways from America’s second-largest bank failure” CNN, 11 Mar. 2023, https:\/\/www.cnn.com\/2023\/03\/11\/business\/svb-collapse-roundup-takeaways\/index.html<\/a><\/a><\/p>\n

1. <\/span>“Here’s how much of your bank deposits are FDIC protected” The Washington Post, 11 Mar. 2023, https:\/\/www.washingtonpost.com\/business\/2023\/03\/10\/faq-fdic-insurance<\/a><\/a><\/p>\n

2. <\/span>“Treasury Secretary Janet Yellen says U.S. government won’t bail out Silicon Valley Bank” CNBC, 12 Mar. 2023, https:\/\/www.cnbc.com\/2023\/03\/12\/treasury-secretary-janet-yellen-says-us-government-wont-bail-out-silicon-valley-bank.html<\/a><\/a><\/p>\n

3. <\/span>“Silicon Valley Bank had no official chief risk officer for 8 months while the VC market was spiraling” Fortune, 10 Mar. 2023, https:\/\/fortune.com\/2023\/03\/10\/silicon-valley-bank-chief-risk-officer<\/a><\/a><\/p>\n

4. <\/span>“Yellen rules out bailout for Silicon Valley Bank: “We’re not going to do that again”” CBS News, 12 Mar. 2023, https:\/\/www.cbsnews.com\/news\/janet-yellen-silicon-valley-bank-bailout-face-the-nation-interview-today-2023-03-12\/<\/a><\/a><\/p>\n

5. <\/span>“PR-16-2023 3\/10\/2023” FDIC, 10 Mar. 2023, https:\/\/www.fdic.gov\/news\/press-releases\/2023\/pr23016.html<\/a><\/a><\/p>\n

6. <\/span>“Silicon Valley Bank \u2013 The Aftermath. Which Companies Were Impacted?” TipRanks, 12 Mar. 2023, https:\/\/www.tipranks.com\/news\/silicon-valley-bank-the-aftermath-of-the-closure-and-impacted-companies<\/a><\/a><\/p>\n

7. <\/span>“SVB Collapse Has Short Sellers Making $500M, Now they Have to Collect” Bloomberg, 10 Mar. 2023, https:\/\/www.bloomberg.com\/news\/articles\/2023-03-10\/shorts-make-500-million-on-svb-demise-collecting-won-t-be-easy<\/a><\/a><\/p>\n

8. <\/span>“‘This hit like a ton of bricks’: 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","protected":false},"excerpt":{"rendered":"

On Friday, March 12th, 2023, Silicon Valley Bank (SVB) became the second-largest bank failure in U.S. history.[0]<\/a><\/sup> 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]<\/a><\/sup> <\/p>\n

The FDIC will cover up to $250,000 per depositor and may be able to begin paying those depositors as early as Monday.[2]<\/a><\/sup> 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]<\/a><\/sup><\/p>\n

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]<\/a><\/sup> 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.<\/p>\n

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]<\/a><\/sup> 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]<\/a><\/sup><\/p>\n

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]<\/a><\/sup><\/p>\n

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]<\/a><\/sup> 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]<\/a><\/sup> <\/p>\n

The FDIC is selling off the bank’s assets to pay back its customers, including depositors and creditors.<\/p>\n

0. <\/span>“Takeaways from America’s second-largest bank failure” CNN, 11 Mar. 2023, https:\/\/www.cnn.com\/2023\/03\/11\/business\/svb-collapse-roundup-takeaways\/index.html<\/a><\/a><\/p>\n

1. <\/span>“Here’s how much of your bank deposits are FDIC protected” The Washington Post, 11 Mar. 2023, https:\/\/www.washingtonpost.com\/business\/2023\/03\/10\/faq-fdic-insurance<\/a><\/a><\/p>\n

2. <\/span>“Treasury Secretary Janet Yellen says U.S. government won’t bail out Silicon Valley Bank” CNBC, 12 Mar. 2023, https:\/\/www.cnbc.com\/2023\/03\/12\/treasury-secretary-janet-yellen-says-us-government-wont-bail-out-silicon-valley-bank.html<\/a><\/a><\/p>\n

3. <\/span>“Silicon Valley Bank had no official chief risk officer for 8 months while the VC market was spiraling” Fortune, 10 Mar. 2023, https:\/\/fortune.com\/2023\/03\/10\/silicon-valley-bank-chief-risk-officer<\/a><\/a><\/p>\n

4. <\/span>“Yellen rules out bailout for Silicon Valley Bank: “We’re not going to do that again”” CBS News, 12 Mar. 2023, https:\/\/www.cbsnews.com\/news\/janet-yellen-silicon-valley-bank-bailout-face-the-nation-interview-today-2023-03-12\/<\/a><\/a><\/p>\n

5. <\/span>“PR-16-2023 3\/10\/2023” FDIC, 10 Mar. 2023, https:\/\/www.fdic.gov\/news\/press-releases\/2023\/pr23016.html<\/a><\/a><\/p>\n

6. <\/span>“Silicon Valley Bank \u2013 The Aftermath. Which Companies Were Impacted?” TipRanks, 12 Mar. 2023, https:\/\/www.tipranks.com\/news\/silicon-valley-bank-the-aftermath-of-the-closure-and-impacted-companies<\/a><\/a><\/p>\n

7. <\/span>“SVB Collapse Has Short Sellers Making $500M, Now they Have to Collect” Bloomberg, 10 Mar. 2023, https:\/\/www.bloomberg.com\/news\/articles\/2023-03-10\/shorts-make-500-million-on-svb-demise-collecting-won-t-be-easy<\/a><\/a><\/p>\n

8. <\/span>“‘This hit like a ton of bricks’: 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","protected":false},"author":3,"featured_media":2135,"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\/2136"}],"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=2136"}],"version-history":[{"count":0,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/posts\/2136\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/media\/2135"}],"wp:attachment":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/media?parent=2136"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/categories?post=2136"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/tags?post=2136"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}