The U.S. government announced
on Sunday that all depositors at the failed Silicon Valley Bank will
have access to all their funds on Monday, with the money coming from the
FDIC's deposit insurance fund.
It also announced that Signature
Bank in New York was seized and closed on Sunday, and its depositors
will also have access to their money on Monday.
- The announcement made sure to mention that no losses associated with either bank would be borne by the taxpayer.
- Shareholders and some unsecured creditors will lose their investments.
- Earlier on Sunday, U.S. Treasury Secretary Janet Yellen told CBS' "Face the Nation" that there would be no government bailout for the failed Silicon Valley Bank.
- The bank faced a run after revealing that it needed $2.25B to strengthen its balance sheet, and regulators closed the bank and seized its assets on Friday.
- Officials spent the weekend crafting a solution.
- The FDIC attempted to find a buyer for SVB's assets but struggled to do so. PNC expressed interest but decided not to bid after doing initial due diligence.
- The bank's collapse, left unresolved, could have had far-reaching consequences, including startups being unable to pay employees and venture investors struggling to raise funds.
- By last Thursday, depositors took out over $42B, which paved the way for the second-largest bank collapse in U.S. history.
- One
founder of a small startup in Ohio said as part of a Twitter thread
that she tried to wire most of her company's money out of its SVB
account on Thursday but learned Friday that the wire transfer did not process.
