Posted BY: | NwoReport
California-based commercial lending giant Silicon Valley Bank had its charter revoked and was transferred into receivership on March 10 after a bank run – which occurs when too many clients try to get their money out at once. The collapse sent shockwaves rippling across the financial world. What exactly happened? And what’s next? Sputnik explains.
At the beginning of the workweek, Silicon Valley Bank (SVB) was, on paper, America’s 16h largest bank, with some $209 billion in assets and $175.4 billion in reported deposits, and more than 8,500 employees at branch offices around the world.
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On Friday, the bank’s doors were closed and it was taken over by the Federal Deposit Insurance Corporation, which set up a new entity – the ‘Deposit Insurance National Bank of Santa Clara’, and told SVB employees that they would be kept on for 45 more days before being booted out the door. The DINBSC will open up on Monday, and over the coming month and a half, will gradually liquidate itself, making dividend payments to uninsured deposit holders (which account a whopping 93 percent of all deposits, according to Securities and Exchange Commission filings), and payouts to clients with holdings of less than $250,000 (the standard deposit insurance amount). After that, after nearly forty years in the business, SVB will be no more.
