U.S. authorities announced this Friday that they have closed Silicon Valley Bank, a bank close to technology and suddenly in trouble, entrusting the management of deposits to the agency responsible for its guarantees (FDIC).
The latter plans to reopen 17 bank branches on Monday and allow customers to withdraw up to €236,000 in the short term, an amount the FDIC would normally guarantee.
Those who have the most money in their bank accounts, that is, the majority of bank customers, should contact the branch.
It was the California Financial Protection and Innovation Authority (DFPI) that formally took over the banking institution, citing “its illiquidity and insolvency.”
Management was entrusted to the FDIC, which set up a dedicated unit for the purpose, which would, among other things, manage the bank’s assets and loans.
At the end of 2022, the bank had assets of $209 billion and deposits of about $175.4 billion, according to authorities.
SVB, little known to the general public, was the 16th largest North American bank by assets.
Based in Santa Clara, California, Silicon Valley Bank specialized in the technology sector and did business primarily with growth companies.
Due to the difficulties facing the sector, including rising interest rates and volatile technology, clients have withdrawn a lot of money from their accounts in recent months.
In order to have sufficient liquidity, the Silicon Valley bank announced on Wednesday evening that it is looking to raise capital quickly. In the ensuing turmoil, the bank lost 60% on the New York Stock Exchange on Thursday, and shares were suspended before the session began that Friday.