Thiel was also blamed for the bank run on SVB, in which depositors attempted to withdraw some $40 billion from the tech-industry bank in 24 hours. Thiel's Founders Fund had advised clients not to keep all their cash in SVB, and to spread it around to other financial institutions.
The Financial Times reports that Thiel kept his $50 million in SVB despite fears as to the bank's viability. "I had $50mn of my own money stuck in SVB," he told FT. As to why, he told FT he did not believe the bank would fail.
His account, along with that of all the rest of SVB's depositors, as frozen by the FDIC. The FDIC, which only insures accounts up to a $250,000 deposit limit, has promised to protect all depositors from losses.
SVB sold off their entire holding of treasury bonds, valued at some $21 billion, but due to the fire sale nature of the sell-off, took a $2 billion loss. Revalations of this sale triggered a run on the bank as depositors sought to get their money out. Many depositors had funds with SVB well in excess of the FDIC-insured limit of $250,000.
The Biden administration said on Sunday that they would move to protect all depositors at SVB, and would use FDIC insurance to make sure those depositors suffered no losses, despite taking the risk of depositing more than the FDIC-insured limit.
Treasury Secretary Janet Yellen said the bank would not be bailed out, and both she and Biden attempted to assure consumers that US banks are safe, using the FDIC insurance to
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