A customer stands outside of a shuttered Silicon Valley Bank (SVB) headquarters on March 10, 2023 in Santa Clara, California.
Justin Sullivan | Getty Images
Silicon Valley Bank’s customers, along with investors and bankers across the globe, are waiting for an announcement from U.S. regulators about what comes next after the largest bank failure since 2008.
The Federal Deposit Insurance Corporation (FDIC) said Friday that SVB would reopen on Monday morning, under the control of the newly created Deposit Insurance National Bank of Santa Clara. Once that happens, insured depositors with up to $250,000 in their accounts will be able to access their money.
But the majority of deposits at SVB were not insured, and it is unclear when those customers will be able to access their money — or whether they will get all of it back. SVB’s role as a key bank for start-ups and other venture-backed companies means that many firms could struggle to meet payroll and other obligations if their money is not quickly recovered.
Many investors on Wall Street and in Silicon Valley are anticipating additional information to be announced at some point on Sunday. Here’s a look at some of the paths forward from here.
Regulators’ options
Treasury Secretary Janet Yellen said Sunday that a bailout of SVB is not on the table but that regulators are exploring other options.
“We are concerned about depositors and are focused on trying to meet their needs,” Yellen said on CBS’ “Face the Nation.”
“This is really a decision for the FDIC, as it decides on what the best course is to resolve this firm,” she added.
U.S. Treasury Secretary Janet Yellen attends a U.S. House Ways and Means Committee hearing on President Joe Biden’s fiscal year 2024 Budget Request on Capitol Hill in Washington, U.S., March 10, 2023.
Evelyn Hockstein | Reuters
One potential option could be to use the FDIC’s systemic risk exception tool to backstop the uninsured deposits at SVB. Under the Dodd-Frank Act, that move would need to be…
Read the full article here