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FDIC closes Silicon Valley Bank and creates new entity

BIScom Subsection: 
Editorial Staff

Having ordered the closure of Silicon Valley Bank in the USA, FDIC has created "Deposit Insurance National Bank of Santa Clara" to which depositors' funds will be transferred - so long as they are insured.

The new bank will open today (Monday 13th March) and depositors will be able to access their funds up to the insured limits. According to the FDIC "Silicon Valley Bank had 17 branches in California and Massachusetts. The main office and all branches of Silicon Valley Bank will reopen on Monday, March 13, 2023. The new bank will maintain Silicon Valley Bank’s normal business hours. Banking activities will resume no later than Monday, March 13, including on-line banking and other services. Silicon Valley Bank’s official cheques will continue to clear. "

The FDIC retains all the bank's assets that are not transferred. "As of 31 December, 2022, Silicon Valley Bank had approximately USD209,000 million in total assets and about USD175,400 million in total deposits. At the time of closing, the amount of deposits in excess of the insurance limits was undetermined. The amount of uninsured deposits will be determined once the FDIC obtains additional information from the bank and customers."

The FDIC intends to pay uninsured depositors an advance dividend within the next week" to reduce hardship to the tech companies which have their working capital in the bank.

Silicon Valley Bank is the first bank, in the US, to fail this year and is the largest failure in almost two decades.

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