Regulators Take Over 16th US Largest Bank SVB

US Regulators Have Shut Down Silicon Valley Bank.

06:39 PM WAT, Sat March 11, 2023

United States financial regulators have shut down Silicon Valley Bank (SVB) and assumed control of its customer deposits in the largest failure of a US bank in more than a decade.

The moves came as the financial firm, a key tech lender to venture capital and private equity firms, was scrambling to raise money to plug a loss from the sale of assets affected by higher interest rates.

The collapse came after SVB said it was trying to raise $2.25bn (£1.9bn) to plug a loss caused by the sale of assets, majorly US government bonds, which had been affected by higher interest rates.

The news caused investors and customers to flee the bank. Shares saw their biggest one-day drop on record on Thursday, plunging more than 60% and fell further in after-hours sales before trading was halted.

Concerns that other banks could face similar problems led to widespread selling of bank shares globally on Thursday and early Friday.

Financial officials said they acted to protect insured depositors. They added that Silicon Valley Bank faced inadequate liquidity and insolvency.

The Federal Deposit Insurance Corporation (FDIC), which typically protects deposits up to $250,000, said it had taken charge of the roughly $175bn (£145bn) in deposits held at the bank, the 16th largest in the US.

It said bank offices would reopen and clients with insured deposits would have access to funds no later than Monday morning, adding that money raised from selling the bank's assets would go to uninsured depositors.