U.S. regulators close Silicon Valley Bank

(Xinhua) 14:06, March 11, 2023

SAN FRANCISCO, March 10 (Xinhua) -- Silicon Valley Bank (SVB), the 16th largest bank in the United States, was closed on Friday by regulators, according to the U.S. Federal Deposit Insurance Corporation (FDIC).

An FDIC memo released on Friday said the California Department of Financial Protection and Innovation closed the bank after its stocks sputtered. The bank's operations will resume on Monday with the FDIC in charge.

All insured depositors will have "full access" to "insured" deposits no later than Monday morning, and official checks "will continue to clear," said the FDIC.

Deposit insurance, as per the FDIC's definition, means that deposits are insured up to 250,000 U.S. dollars per depositor, per FDIC-insured bank, per ownership category.

The move came after the Santa Clara-headquartered bank announced Wednesday that it lost 1.8 billion dollars in the sale of U.S. treasuries and mortgage-backed securities it had invested in, owing to rising interest rates. The bank was also facing shrinking deposits as the tech industry struggled.

Panic ensued, leading the share price to tank sharply and triggering the run on the 40-year-old bank that holds 210 billion dollars in assets.

The SVB's failure is the largest bank failure since the collapse of U.S. savings and loan association Washington Mutual in 2008, The Associated Press reported.

More than half of the bank's current loans went to major venture capital and private equity firms, while another quarter went to tech and life sciences companies.

The bank has an estimated 6,500 employees, according to U.S. online newspaper TechCrunch. 

(Web editor: Peng Yukai, Sheng Chuyi)


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