Silicon Valley Bank shut down

OAN Roy Francis
UPDATED 1:31 PM – Friday, March 10, 2023

California Department of Financial Protection and Innovation announced that it will take over Silicon Valley Bank (SVB).

Federal Deposit Insurance Corporation, (FDIC), will be the receiver. This separate entity will hold all insured deposits that were made at SVB by Monday.

SVB deposits can be insured up to $250,000 per person, just like all FDIC-member banks. The FDIC is yet to determine the maximum amount of deposits that exceed this limit. They stated that “will be working over the weekend” It is difficult to determine the exact numbers, but initial numbers indicate that more than 97.3% are above the bank’s insured limit.

SVB’s closure is the largest bank failure since 2008’s financial crisis, when Washington Mutual was dissolved. FDIC data shows that SVB, the 16th largest bank, was closed in 2008.^Th The nation’s largest bank, with assets of more than $209 billion and deposits of more than $175 trillion as of December 2018, was the country’s largest.

Santa Clara’s bank was in trouble when it announced earlier this week that it had sold $21 billion in securities. The bank was now debating whether to offer over $1 billion in shares as a way of raising capital. “general corporate purposes.”

The announcement raised concerns among investors and depositors, who began to wonder whether their bank deposits were safe.

The bank’s shares fell more than 60% on Thursday and then dropped by double digits on Friday morning, before the markets opened. After that, trading of the bank’s shares was halted. As news of SVB broke other banks also suffered a drop in shares, including First Republic Bank PacWest Bancorp and Western Alliance Bancorporation.

House lawmakers heard from Janet Yellen on Friday morning, the Treasury Secretary. “monitoring” Recent developments should be concerning for the economy.

“There are recent developments that concern a few banks that I’m monitoring very carefully,” She spoke. “And when banks experience financial loss it is and should be a matter of concern.”

SVB is a bank for West Coast startups. Due to high interest rates and economic slowdown, the tech industry has suffered a severe blow.

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