On Friday, federal regulators seized the Silicon Valley Bank (SVB) following a run on the bank and the Federal Deposit Insurance Corporation (FDIC) later said they could only guarantee insurance on deposits up to $250,000.
On Sunday, federal regulators are set to auction off Silicon Valley Bank in hopes a buyer would help in efforts to repay those who have deposits with the banks, reports the Wall Street Journal.
On Friday, federal regulators seized the Silicon Valley Bank (SVB) following a run on the bank and the Federal Deposit Insurance Corporation (FDIC) later said they could only guarantee insurance on deposits up to $250,000.
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View on RumbleA "run on" a bank happens when those who have deposited money with the bank start withdrawing cash all at the same time. It usually follows concerns that the bank will fold or would be otherwise unable to pay out their deposits in a timely fashion and in full.
Prior to Friday's run on SVB, the company announced on Wednesday that they were looking to raise over $2 billion in capital due to a $1.8 billion loss on asset sales. On Thursday, shares of their parent company fell 60 percent and another 60 on Friday.
The FDIC's standard insurance only covers up to $250,000 per depositor, per bank, and the Wall Street Journal reports those with more than that amount will be given receivership certificates for their uninsured balances.
SVB's fall is the biggest bank failure since the 2008 Great Recession when Washington Mutual collapsed.
According to a press release, the FCIA said they were appointed by the California Department of Financial Protection and Innovation after they closed SVB..
This story is breaking and will be updated.
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