[News] Silicon Valley Bank: Regulators take over as failure raises fears

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• US regulators have shut down Silicon Valley Bank (SVB) and taken control of its customer deposits in the largest failure of a US bank since 2008.

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

  Its troubles prompted a rush of customer withdrawals and sparked fears about the state of the banking sector.

  Officials said they acted to "protect insured depositors".

  Silicon Valley Bank faced "inadequate liquidity and insolvency", banking regulators in California, where the firm has its headquarters, said as they announced the takeover.

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  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.

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

   

• Investor flight
  With many of the firm's customers in that position, the situation has left many companies with money tied up at the bank worried about their future.

  "I'm on my way to the branch to find my money right now. Tried to transfer it out yesterday didn't work. You know those moments where you might be really screwed but you're not sure? This is one of those moments," one start-up founder told the BBC

 

 

 

• Another founder of a healthcare start-up said: "Literally three days ago, we just hit a million dollars in our bank account... And then this happens."
• He managed to get the money wired to a different account 40 minutes before the deadline. "It was pending. And then this morning, it was there. But I know other people who did the same thing minutes after me, and it's not transferred."
• "It was a crazy situation," he said.

 

https://www.bbc.com/news/business-64915616