{"id":2152,"date":"2023-03-12T19:02:51","date_gmt":"2023-03-13T00:02:51","guid":{"rendered":"https:\/\/embarrdowns.com\/silicon-valley-bank-shuts-down-fdic-appointed-receiver-government-backs-insured-deposits\/"},"modified":"2023-03-12T19:02:52","modified_gmt":"2023-03-13T00:02:52","slug":"silicon-valley-bank-shuts-down-fdic-appointed-receiver-government-backs-insured-deposits","status":"publish","type":"post","link":"https:\/\/embarrdowns.com\/silicon-valley-bank-shuts-down-fdic-appointed-receiver-government-backs-insured-deposits\/","title":{"rendered":"Silicon Valley Bank Shuts Down: FDIC Appointed Receiver, Government Backs Insured Deposits"},"content":{"rendered":"

Regulators shut down Silicon Valley Bank on Friday, making it the largest U.S. bank failure since the 2008 recession.[0]<\/a><\/sup> Tens of millions in customer deposits were withdrawn on Thursday in a run on the bank, spurring fears that other mid-sized banks could face similar pressure without federal support.[1]<\/a><\/sup> The Federal Deposit Insurance Corporation (FDIC) was appointed receiver, and is working to find a buyer for the institution.[2]<\/a><\/sup><\/p>\n

Silicon Valley Bank was founded in 1983 in Santa Clara, California, and quickly became the bank for the burgeoning tech sector there.[1]<\/a><\/sup> It catered to venture capital and private equity, and claimed to bank for nearly half of all U.S. venture-backed startups as of 2021.[3]<\/a><\/sup> However, the bank faced liquidity problems due to its exposure to risky loans and investments.[4]<\/a><\/sup><\/p>\n

On Wednesday, SVB Financial Group announced it would undertake a $2.25 billion share sale after selling $21 billion of securities from its portfolio at a nearly $2 billion loss.[5]<\/a><\/sup> The move spooked markets and clients, and the share price of SVB Financial plunged on Thursday.[6]<\/a><\/sup> By Friday morning, trading of the stock was halted, and there were reports SVB was in talks to sell.[3]<\/a><\/sup> It was reported that major venture capitalists like Peter Thiel and Union Square Ventures instructed their companies to withdraw their funds from the bank as soon as possible.[3]<\/a><\/sup><\/p>\n

More than 85% of Silicon Valley Bank’s deposits were uninsured, according to estimates in a recent regulatory filing.[2]<\/a><\/sup> Officials from the FDIC are exploring the possibility of providing a government guarantee for all deposits in a bank, with the current insurance limit set at $250,000, according to The Washington Post.[3]<\/a><\/sup><\/p>\n

Treasury Secretary Janet Yellen said Sunday that the federal government will not provide a bailout for Silicon Valley Bank’s investors after the bank was abruptly shuttered, but said financial regulators are “concerned” about the impact on depositors and working to address their needs.[7]<\/a><\/sup> Apart from giving out loans, SVB put a large portion of funds into Treasury bonds that won’t reach maturity for several years.[8]<\/a><\/sup> The increase in interest rates by the Federal Reserve has caused bond prices to decrease.[8]<\/a><\/sup><\/p>\n

The U.S. government announced on Sunday evening that all clients of the failed Silicon Valley Bank would have access to their funds on Monday morning.[9]<\/a><\/sup> This coming Monday, the FDIC has confirmed that customers will have unrestricted access to their insured deposits up to $250,000.[5]<\/a><\/sup><\/p>\n

0. <\/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

1. <\/span>“Fed and FDIC discussing backstop to make SVB depositors whole and stem contagion fears: Source” CNBC, 12 Mar. 2023, https:\/\/www.cnbc.com\/2023\/03\/12\/fed-fdic-discussing-backstop-to-make-svb-depositors-whole-and-stem-contagion-fears-source.html<\/a><\/a><\/p>\n

2. <\/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

3. <\/span>“What is Silicon Valley Bank? The bank\u2019s collapse, explained.” Vox.com, 10 Mar. 2023, https:\/\/www.vox.com\/technology\/23634433\/silicon-valley-bank-collapse-silvergate-first-republic-fdic<\/a><\/a><\/p>\n

4. <\/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

5. <\/span>“How does a bank collapse in 48 hours? A timeline of the SVB fall” CNN, 11 Mar. 2023, https:\/\/www.cnn.com\/2023\/03\/11\/business\/svb-bank-collapse-explainer-timeline\/index.html<\/a><\/a><\/p>\n

6. <\/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

7. <\/span>“No Bailout for SVB. Here’s What to Expect.” Barron’s, 12 Mar. 2023, https:\/\/www.barrons.com\/articles\/no-bailout-for-svb-heres-what-to-expect-d1a9ddc8<\/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

9. <\/span>“FDIC holds auction for SVB amid growing uncertainty” POLITICO, 12 Mar. 2023, https:\/\/www.politico.com\/news\/2023\/03\/12\/fdic-holds-auction-for-svb-amid-growing-uncertainty-00086696<\/a><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Regulators shut down Silicon Valley Bank on Friday, making it the largest U.S. bank failure since the 2008 recession.[0]<\/a><\/sup> Tens of millions in customer deposits were withdrawn on Thursday in a run on the bank, spurring fears that other mid-sized banks could face similar pressure without federal support.[1]<\/a><\/sup> The Federal Deposit Insurance Corporation (FDIC) was appointed receiver, and is working to find a buyer for the institution.[2]<\/a><\/sup><\/p>\n

Silicon Valley Bank was founded in 1983 in Santa Clara, California, and quickly became the bank for the burgeoning tech sector there.[1]<\/a><\/sup> It catered to venture capital and private equity, and claimed to bank for nearly half of all U.S. venture-backed startups as of 2021.[3]<\/a><\/sup> However, the bank faced liquidity problems due to its exposure to risky loans and investments.[4]<\/a><\/sup><\/p>\n

On Wednesday, SVB Financial Group announced it would undertake a $2.25 billion share sale after selling $21 billion of securities from its portfolio at a nearly $2 billion loss.[5]<\/a><\/sup> The move spooked markets and clients, and the share price of SVB Financial plunged on Thursday.[6]<\/a><\/sup> By Friday morning, trading of the stock was halted, and there were reports SVB was in talks to sell.[3]<\/a><\/sup> It was reported that major venture capitalists like Peter Thiel and Union Square Ventures instructed their companies to withdraw their funds from the bank as soon as possible.[3]<\/a><\/sup><\/p>\n

More than 85% of Silicon Valley Bank’s deposits were uninsured, according to estimates in a recent regulatory filing.[2]<\/a><\/sup> Officials from the FDIC are exploring the possibility of providing a government guarantee for all deposits in a bank, with the current insurance limit set at $250,000, according to The Washington Post.[3]<\/a><\/sup><\/p>\n

Treasury Secretary Janet Yellen said Sunday that the federal government will not provide a bailout for Silicon Valley Bank’s investors after the bank was abruptly shuttered, but said financial regulators are “concerned” about the impact on depositors and working to address their needs.[7]<\/a><\/sup> Apart from giving out loans, SVB put a large portion of funds into Treasury bonds that won’t reach maturity for several years.[8]<\/a><\/sup> The increase in interest rates by the Federal Reserve has caused bond prices to decrease.[8]<\/a><\/sup><\/p>\n

The U.S. government announced on Sunday evening that all clients of the failed Silicon Valley Bank would have access to their funds on Monday morning.[9]<\/a><\/sup> This coming Monday, the FDIC has confirmed that customers will have unrestricted access to their insured deposits up to $250,000.[5]<\/a><\/sup><\/p>\n

0. <\/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

1. <\/span>“Fed and FDIC discussing backstop to make SVB depositors whole and stem contagion fears: Source” CNBC, 12 Mar. 2023, https:\/\/www.cnbc.com\/2023\/03\/12\/fed-fdic-discussing-backstop-to-make-svb-depositors-whole-and-stem-contagion-fears-source.html<\/a><\/a><\/p>\n

2. <\/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

3. <\/span>“What is Silicon Valley Bank? The bank\u2019s collapse, explained.” Vox.com, 10 Mar. 2023, https:\/\/www.vox.com\/technology\/23634433\/silicon-valley-bank-collapse-silvergate-first-republic-fdic<\/a><\/a><\/p>\n

4. <\/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

5. <\/span>“How does a bank collapse in 48 hours? A timeline of the SVB fall” CNN, 11 Mar. 2023, https:\/\/www.cnn.com\/2023\/03\/11\/business\/svb-bank-collapse-explainer-timeline\/index.html<\/a><\/a><\/p>\n

6. <\/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

7. <\/span>“No Bailout for SVB. Here’s What to Expect.” Barron’s, 12 Mar. 2023, https:\/\/www.barrons.com\/articles\/no-bailout-for-svb-heres-what-to-expect-d1a9ddc8<\/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

9. <\/span>“FDIC holds auction for SVB amid growing uncertainty” POLITICO, 12 Mar. 2023, https:\/\/www.politico.com\/news\/2023\/03\/12\/fdic-holds-auction-for-svb-amid-growing-uncertainty-00086696<\/a><\/a><\/p>\n","protected":false},"author":3,"featured_media":2151,"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\/2152"}],"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=2152"}],"version-history":[{"count":0,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/posts\/2152\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/media\/2151"}],"wp:attachment":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/media?parent=2152"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/categories?post=2152"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/tags?post=2152"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}