Regulators shut down Silicon Valley Bank
Last Friday, regulators closed Silicon Valley Bank and took control of its deposits. While customers are worried about their funds, the FDIC has assured insured depositors will receive their money.
The move is the biggest bank failure in decades.
On Friday, the Federal Deposit Insurance Corp. announced that financial regulators have closed Silicon Valley Bank, and taken control of its deposits as well.
This news marks the biggest U.S. bank failure ever since the global financial crisis that happened over a decade ago.
The Silicon Valley Bank collapse – who’s a crucial player in the venture capital community – now leaves a series of wealthy entrepreneurs and tech companies unsure of what comes next, and most importantly, what will happen to their funds.
In a press release from regulators, it states that the California Department of Financial Protection and Innovation is responsible for closing Silicon Valley Bank. It also says that it named FDIC as the receiver.
According to the press release, insured SVB deposits are now held at the Deposit Insurance National Bank of Santa Clara, which was created by the FDIC for this purpose.
In the announcement, the FDIC stated that all depositors will gain access to their funds on Monday morning. It also says that all Silicon Valley Bank branches will reopen around the same time – but under control of regulators.
The press release also says that checks belonging to SVB will continue to clear.
What happens to Silicon Valley Bank customers with more than the FDIC’s insured amount?
By law, FDIC’s insurance covers up to $250,000 per customer, for every account ownership. According to the FDIC, uninsured customers will receive certificates for their bank balances.
Uninsured depositors will also receive an advance dividend starting next week, paid by the regulator. Additional dividends may happen as they sell Silicon Valley Bank’s assets.
However, what remains unclear is what will happen to depositors with more than $250,000 deposited into their accounts.
Whether or not they will get their funds back depends on the amount the regulator gets with SVB’s assets sale, or if another financial institution decides to take ownership of those assets.
Rising concerns in the tech community revolve mainly on the fact that, until these events unfold, there might be issues making payroll.
As of last December, Silicon Valley Bank had close to $209 billion in assets and over $175 billion in deposits. However, the FDIC says it’s still unclear what percentage of those deposits were above the $250,000 coverage.
According to financial experts, the last bank failure of this magnitude in the U.S. happened in 2008 with Washington Mutual. At the time, WM had close to $307 billion in assets.
You will be redirected to another website
Learn how to close a bank account
Do you want to close your bank account but don’t know where to start? Maybe you’re tired of paying unnecessary fees and would rather take your money elsewhere. Or maybe the pace of change at a big financial institution is just too slow for your needs.
Whatever the reason, learning how to close a bank account doesn’t have to be complicated or stressful.
In the following link, we’ll show you everything from understanding why it’s important to ensuring all payments are handled properly before taking that final step of cutting ties with an old account. Read on!
About the author / Aline Barbosa
Discover the Best Apps When Traveling for a Seamless Journey
Explore the best apps when traveling for stress-free journeys. From cheap flights and hotels to offline maps, travel smarter!Keep Reading
Future iPhones will have USB-C charging in the EU
At a Tech Live conference, Apple’s senior vice president of worldwide marketing confirmed that the new iPhones will have USB-C charging.Keep Reading
Best custom product options: Tailor-made just for you
Having a tailor-made product is something special. Find out why and see some of the best custom product options available today!Keep Reading
You may also like
Was the Amazon package not delivered? Here are some tips on what to do!
If your Amazon package was not delivered, don’t panic! We've got the steps you need to take to get it sorted out.Keep Reading
Discover It® Student Chrome review
Looking for a student credit card that offers cash back rewards? Then check out our Discover It® Student Chrome review!Keep Reading
Where should you invest your retirement fund savings?
Not sure where to invest your retirement fund savings? We’ll provide helpful advice and tips on how to make the most of those investments.Keep Reading