On Friday, federal bank regulators seized Silicon Valley Bank (SVB), a major banking institution for venture-backed companies, in the most notable bank failure since the 2008 recession.
In a press release posted on Friday, the Federal Deposit Insurance Corporation (FDIC) said the California Department of Financial Protection and Innovation closed SVB and appointed the FDIC as the receiver.
The FDIC has created the Deposit Insurance National Bank of Santa Clara, which now holds SVB’s insured deposits.
According to the Wall Street Journal, the closure came following a run on deposits at the bank.
The FDIC said that insured depositors will have full access to their insured deposits no later than Monday morning, and that uninsured depositors would be paid an advance dividend within the next week.
SVB’s normal business hours at all branches and banking activities will resume next week, being maintained by the DINB. Additionally, the FDIC said that SVB official checks will continue to clear.
According to CNBC, the FDIC’s standard insurance covers up to $250,000 per depositor, per bank.
According to the Wall Street Journal, those with insured balances in excess of this amount will get receivership certificates for their uninsured balances.
As of December 31, 2022, SVB had approximately $209.0 billion in total assets and about $175.4 billion in total deposits, though the FDIC said it was currently unclear how many deposits were in excess of the insurance limit.
On Wednesday, SVB announced that it was looking to raise more than $2 billion in capital after experiencing a $1.8 billion loss on asset sales.
Shares of SVB Financial Group, the parent company of SVB, fell 60 percent on Thursday, as well as an additional 60 percent in Friday premarket trading before being halted.
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