The Federal Deposit Insurance Corp., the Treasury Department, and the Federal Reserve jointly guaranteed all deposits of Silicon Valley Bank, which collapsed last Friday.
The regulators assured all depositors that they would make funds available to meet withdrawals. The news will provide some respite to startups that had their capital held in SVB, many of which were scrambling to raise emergency funds from VCs to meet payroll and operational cash requirements.
- SVB's clients reportedly tried to withdraw nearly $42B from the bank last week, which drove it to insolvency.
- Some startup founders were considering liquidating their stakes in the secondary market, where buyers were asking for a 50% discount.
- Many of the VCs were extending loans to their portfolio startups.
- Meanwhile, HSBC acquired SVB's U.K. unit for £1.
- The Bank of England assured depositors that "all depositors' money with SVB UK is safe and secure as a result of this transaction."
- SVB's U.K. division holds $3B (£2.5B) worth of deposits from nearly 300 British VC-backed startups.
