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1/29/25, 2:00 PM

Regulators take over Silicon Valley Bank, citing poor 'liquidity and insolvency' | American Banker

Regulators shut down Silicon Valley Bank on Friday, capping a remarkable 44-hour fall for the tech heavy bank and sending shock waves through the nancial system.

The California Department of Financial Protection and Innovation took possession of the struggling bank, whose stock price tanked 60% the day before, and appointed the Federal Deposit Insurance Corp. as the bank's receiver. It cited inadequate liquidity and insolvency.

The FDIC said it has created the Deposit Insurance National Bank of Santa Clara and transferred all of SVB's insured deposits to that entity. The agency said all insured depositors "will have full access to their insured deposits no later than Monday morning."

The FDIC also said that it "will pay uninsured depositors an advance dividend within the next week." The bank's branches will reopen on Monday, the FDIC said.

Earlier on Friday morning, trading in SVB Financial, the bank's $212 billion-asset parent company, had been paused, and some media reports said the bank was in talks to pursue a sale. The Santa Clara, California-based bank, which on Wednesday announced $1.8 billion in bond-related losses and a plan to raise more capital, was among the 20 largest in the country by assets.

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The FDIC insures depositors' accounts up to $250,000. But many of Silicon Valley Bank's deposits are above that threshold, according to a research note from RBC Capital Markets analyst Gerard Cassidy.

https://www.americanbanker.com/news/regulators-take-over-silicon-valley-bank-citing-poor-liquidity-and-insolvency

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