Posted BY: Bill | NwoReport
Silicon Valley Bank has been seized by financial regulators after a run on deposits tipped the bank into failure.
The bank was shuttered on Friday by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation (FDIC) as a receiver, officials said in a statement.
The FDIC said depositors will have full access to their insured deposits no later than Monday morning. The federal agency insures each depositor to at least $250,000.
This is a breaking news update, more to follow.
Shares of SVB dropped as much as 64% in premarket trading after slumping about 60% in the previous session, when it disclosed plans to raise over $2 billion from investors to counter $1.8 billion in losses from the sale of bonds.
The bank on Friday morning was preparing to announce that it was in discussions for a sale — but word emerged that a huge run on the bank’s deposits had cast doubt on a bailout merger, according to a report from CNBC citing sources.
‘The market has to prepare for the possibility that there will not be a sale, and then you can leave it to your own imagination what that means,’ said CNBC anchor David Faber, phoning into the network while on vacation.
The trading halt on SVB shares began at 8.35 am Friday and extended well over two hours without any announcement as promised. If the bank fails to find a buyer, it could face intervention from federal regulators, who normally move into
In a memo reported by Reuters, SVB Financial Group told its employees to work from home until further notice, stating: ‘SVB is undergoing a series of conversations that have not been concluded yet to determine next steps for the company.’
The bank based in Santa Clara, California is the 18th largest bank in the US with assets of $212 billion as of September and primarily caters to the tech startups and venture funds of Silicon Valley.