SVB is reportedly in talks to sell after failed bank financing attempts. / AFP
U.S. officials shut down Silicon Valley Bank on Friday to protect customer deposits and plan to reopen the institution on Monday under federal control, saying the financial institution’s problems will contagion to other countries. Amid fears, official sources reported. Sector.Bank..
Having worked with the tech sector since the 1980s, the bank was alarmingly illiquid.
The California Department of Financial Protection and Innovation (DFPI) has closed the SVB and designated the Federal Deposit Insurance Corporation (FDIC) as the custodian of bank funds, federal agencies reported Friday.
DFPI “acquired Silicon Valley Bank due to insufficient liquidity and insolvency,” the California agency said.
The bank’s 17 branches will reopen Monday under the control of a new organization specially created by the FDIC to manage the agency’s operations.
In the short term, customers can withdraw up to $250,000. Customers with the most money in the majority bank were invited to contact the FDIC.
SVB was the first financial institution to have deposits insured by a federal corporation since 2020, according to the FDIC.
It is also the largest US bank failure in terms of assets since the 2008 financial crisis.
The situation has raised concerns among investors that other banks could face problems as the central bank hikes interest rates to curb inflation.
The authority’s decision protects client assets and saves time in finding potential buyers for the assets of insolvent entities.
Shares of Silicon Valley Group, the parent company of Silicon Valley Bank (SVB), plunged 60% yesterday. / AFP
surprise.
SVB’s troubles stretched across borders and stunned the global banking industry.
At the end of 2022, banks had $209 billion in assets and about $175.4 billion in deposits, according to authorities.
Treasury Secretary Janet Yellen met with financial regulators on Friday to discuss the situation with the SVB and said the banking system “remains resilient and regulators are prepared to respond to events of this nature,” the Treasury Department said in a statement. We have an effective tool for .
The big four US banks lost $52 billion in the stock market alone on Thursday. The move also affected Asian and European banks, which recorded significant losses in market capitalization.
Wall Street closed lower on Friday, strongly affected by the incident. The Dow Jones fell 1.07%, the Technology Nasdaq 1.76% and the S&P 500 Index fell 1.45%.
3 Technology Bank
1.- Established in California
SVB is a California-based bank that specializes in the technology sector and primarily deals with funds that invest in privately held companies.
2.- 16th largest US property.
Little known to the public, it was the 16th largest bank in the United States by assets. The company has operations in the United States, Europe, Asia and Israel.
3.- Cause
SVB suffered a deterioration in the sector. A sharp rise in interest rates in the US impacting a sector heavily reliant on financing for growth.
Source: Diario.Elmundo
