Financial regulators in California have close Silicon Valley Bank (SVB) and are now in control of its deposits according to the Federal Deposit Insurance Corp. on Friday. This is the largest U.S. bank failure since the global financial crisis in 2008.
This collapse left companies and wealthy individuals clueless of what will happen to their money, since SVB is a key player in the tech and venture capital community.
The Federal Deposit Insurance Corp. (FDIC) said in a statement that the bank should reopen headquarter and other branches on the 13th of March under the control of the regulator.
The FDIC said that uninsured depositors will be provided with receivership certificates for their balances. They will also be paid an advanced dividend within the coming week, in addition to other dividend payments as the regulator sells SVB’s assets.
Whether depositors with more than $250,000 will get their money back shall be determined based on the amount of money acquired by the regulator after the assets sale.
There has been agitation in the technology field due to the fact that until the process unfolds, some companies might face difficulty making payroll.
According to CNBC, by then end of December, SVB had $209 billion in total assets and $175.4 billion in total deposits.
In the 2008 during the global financial crisis, the Washington Mutual was the U.S. bank failure of this size, which had $307 billion in assets.