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Saturday, December 2, 2023

Silicon Valley bank shut down and taken over by California financial sector ‘due to illiquidity and insolvency’

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Silicon Valley Bank (SVB) was closed by the California Department of Financial Protection and Innovation (DFPI) on Friday (10th) US time, the second bank to close this week after Silvergate Bank announced its closure .

In a statement, DFPI said the bank was taken over “due to illiquidity and insolvency” and said the Federal Deposit Insurance Corporation (FDIC) had taken control of the bank, a claim confirmed by the FDIC.

“Silicon Valley Bank is a state commercial bank and member of the Federal Reserve System with total assets of approximately $209 billion and total deposits of approximately $175.4 billion as of December 31, 2022, which have been taken over by the FDIC,” DFPI said in a statement. stated in the statement.

Reuters reported on Thursday afternoon that some SVB customers in the UK told the media their banks were showing account balances and transfers were down, while some were “pending”.

Although not considered “cryptocurrency-friendly” like Silvergate, Silicon Valley Bank is also considered friendly to new innovations and new technologies, especially for hedge funds and venture capital firms. According to some data, some well-known blockchain institutions Such as Blockchain Capital, Castle Island Ventures, Dragonfly and Pantera all have partnerships with the bank.

Affected by this news, the shares of other West Bank banks have also fallen, including First Republic Bank (FRC), which fell 15% by the time of writing, and Western Alliance Bancorp (WAL), which is regarded as a cryptocurrency friendly Signature, fell 25%. Bank (SBNY) also fell 13%.

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