Published , by TJ Denzer
Published , by TJ Denzer
SVB Financial’s situation seems to get worse by the second today, with the latest update being that Silicon Valley Bank has been closed by regulators. The Federal Deposit Insurance Corp. (FDIC) has taken the reins on deposits at the bank and promised insured depositors that they will have access to their deposits restored by Monday. This spells more bad news for SVB Financial, which had already had its stock plummet and was supposedly in talks to sell itself off entirely.
The FDIC released an announcement on the situation with SVB Financial on March 10, 2023, following word of the bank talking about selling itself off completely. As of today, Silicon Valley Bank has been closed by the California Department of Financial Protection and Innovation, with the FDIC appointed as receiver and overseer of deposits.
“All insured depositors will have full access to their insured deposits no later than Monday morning, March 13, 2023,” the FDIC wrote. “The FDIC will pay uninsured depositors an advance dividend within the next week. Uninsured depositors will receive a receivership certificate for the remaining amount of their uninsured funds. As the FDIC sells the assets of Silicon Valley Bank, future dividend payments may be made to uninsured depositors.”
This follows on top of a whirlwind of bad news for SVB Financial this week. What began with the SIVB stock plummeting this week as CEO Greg Baker wrote that the company was looking to raise over $2 billion in cash to cover its losses turned into a deeper plummet when the group failed to secured that funding and spoke of selling off completely. It’s also worth noting that insured deposits will only cover up to $250,000, which spells bad news for companies that deposited in Silicon Valley Bank beyond that amount.
SVB Financial was a major backer and bank institution for a number of tech startups, but its future remains in serious doubt following today’s announcements. With regulators planning to reopen bank branches under strict regulatory supervision on Monday, stay tuned for further updates as we continue to follow this story.