SVB is biggest U.S. bank to collapse since 2008 financial crisis

WASHINGTON, DC - Global financial markets were stunned on Friday by the collapse of a large Californian-based bank, the second-biggest failure of a bank in U.S. history.

The Silicon Valley Bank, Santa Clara, California, was shut down Friday by the California Department of Financial Protection and Innovation. The Federal Deposit Insurance Corporation (FDIC) has been appointed as receiver.

To protect insured depositors, the FDIC has created the Deposit Insurance National Bank of Santa Clara (DINB). At the time of closing, the FDIC as receiver immediately transferred to the DINB all insured deposits of the Silicon Valley Bank.

The FDIC said in a statement late Friday, all insured depositors will have full access to their insured deposits no later than Monday morning. The FDIC will pay uninsured depositors an advance dividend within the next week. 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 statement said.

Silicon Valley Bank had 17 branches in California and Massachusetts. The main office and all branches of Silicon Valley Bank will reopen on Monday. The DINB will maintain Silicon Valley Bank's normal business hours. Banking activities will resume no later than Monday, including online banking and other services, the FDIC said.

Silicon Valley Bank's official checks will continue to clear. Under the Federal Deposit Insurance Act, the FDIC may create a DINB to ensure that customers have continued access to their insured funds.

As of December 31, 2022, Silicon Valley Bank had approximately $209 billion in total assets and about $175 billion in total deposits. At the time of closing, the amount of deposits in excess of the insurance limits was undetermined. The amount of uninsured deposits will be determined once the FDIC obtains additional information from the bank and customers, the FDIC said.

Customers with accounts in excess of $250,000 are being asked to contact the FDIC tollfree at 1-866-799-0959.

The FDIC as receiver will retain all the assets from Silicon Valley Bank for later disposition. Loan customers should continue to make their payments as usual, the FDIC statement said.

Silicon Valley Bank is the first FDICinsured institution to fail this year. The last FDICinsured institution to close was Almena State Bank, Almena, Kansas, on October 23, 2020.