Silicon Valley Bank customers queue outside of the California location to withdraw money
Customers were seen lined up outside of a Silicon Valley Bank location in Menlo Park, Calif., on Friday after the Federal Deposit Insurance Corporation (FDIC) seized the bank’s assets.
In the biggest bank failure since the 2008 financial crisis, Silicon Valley Bank (SVB) collapsed after worried savers worried about the health of the bank rushed to withdraw their money.
Video captured on a smartphone shows a line of people waiting outside the bank, reminiscent of scenes from the 1930s of a bank run during the Great Depression.
SVB was the 16th largest bank in the United States until it was shut down by California regulators on Friday afternoon. The bank oversaw a number of Startups in the tech industry. Y Combinator, an incubator startup that launched Airbnb, DoorDash, and DropBox, has regularly referred entrepreneurs to them.
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Y Combinator CEO Garry Tan called the collapse of SVB an “annihilation-level event” for startup tech companies.
“I’ve heard from literally hundreds of our founders asking for help on how to get through this. They’re like, ‘Do I have to furlough my workers?’” Tan told the Associated Press.
SILICON VALLEY BANK CLOSED BY REGULATORS
The decline in technology stocks and layoffs in industry contributed to the bank’s failure.
The banks Stocks were down 60% on Friday morning after already falling 60% on Thursday. SVB had sold $1.75 billion worth of stock to offset falling customer deposits.
The California Department of Financial Protection and Innovation (DFPI) took control of the SVB after its bankruptcy and appointed the FDIC as receiver. The FDIC then created the Deposit Insurance National Bank of Santa Clara (DINB), where former SVB customers can access their insured deposits.
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The FDIC said Friday that all insured depositors will have access to their insured deposits up to the legal limit of $250,000 no later than Monday, March 13, 2023
SVB had 17 stores in California and Massachusetts. As of 2022, the bank had approximately $209.0 billion in total assets and approximately $175.4 billion in total deposits. The FDIC said the amount of deposits exceeding insurance limits was undetermined at the time the bank closed.
Customers with deposits greater than $250,000 have been directed to contact the FDIC at 1-866-799-0959.
Andrea Vacchiano of FOX Business and Associated Press contributed to this report.
https://finance.yahoo.com/news/silicon-valley-bank-customers-line-140433081.html Silicon Valley Bank customers queue outside of the California location to withdraw money