Silicon Valley Bank (SVB), a major lender to technology startups, collapsed on Friday and was shut down by U.S. regulators following a run on deposits.
The bank and its nearly $175B in customer deposits were placed in control of the U.S. Federal Deposit Insurance Corporation (FDIC) in what is considered the biggest bank failure since the 2008 financial crisis.
- SVB, which served many U.S. venture-backed companies, is now considered the second-largest bank failure in U.S. history after Washington Mutual in 2008.
- Earlier
on Friday, it was reported that the tech-focused lender was attempting
to find a buyer after it failed to raise capital through an emergency
sale.
- Now, the FDIC has taken control of the bank and is acting as a receiver.
- The
independent government agency formed a new bank, the National Bank of
Santa Clara, to hold deposits, and insured depositors should have access
to their funds by Monday, March 13.
- Customers with deposits
over $250,000, the max covered by FDIC insurance, will receive
certificates for their uninsured funds. The FDIC urged customers with
over $250,000 to contact the agency.
- The shares of SVB plummeted on Thursday, triggering a sell-off that caused the four largest banks in the U.S. to lose $52B in market value.
