Silicon Valley Bank (SVB), headquartered in Santa Clara, California, was shut down on March 10 by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation (FDIC) as a receiver. The closure was announced by the FDIC in a press release on Friday.
In this line, the FDIC created the Deposit Insurance National Bank of Santa Clara (DINB) to protect insured depositors, transferring all insured deposits of Silicon Valley Bank to the DINB at the time of closing.
All insured depositors will have full access to their insured deposits by Monday morning, March 13, 2023, while uninsured depositors will receive a receivership certificate for the remaining amount of their uninsured funds.
As the FDIC sells the assets of Silicon Valley Bank, future dividend payments may be made to uninsured depositors. The FDIC will pay uninsured depositors an advance dividend within the next week. The bank had 17 branches in California and Massachusetts, and the main office and all branches will reopen on Monday, March 13, 2023, with normal business hours resuming.
The collapse of Silicon Valley Bank
Silicon Valley Bank had approximately $209 billion in total assets and about $175.4 billion in total deposits as of December 31, 2022. The amount of uninsured deposits is yet to be determined. As per the official press release, customers with accounts in excess of $250,000 should contact the FDIC toll-free at 1-866-799-0959.
The FDIC, as a receiver, will retain all the assets from Silicon Valley Bank for later disposition. Loan customers should continue to make their payments as usual.
Notably, Silicon Valley Bank is the first FDIC-insured institution to fail this year, with the last being Almena State Bank, Almena, Kansas, on October 23, 2020.
As the United States financial system has been rattled by the collapse of Silicon Valley Bank (SBV) and Silvergate Bank within 48 hours, financial experts like Robert Kiyosaki and Peter Schiff warn of a ‘bigger collapse’ ahead for the banking industry.