June 16, 2024

The Queens County Citizen

Complete Canadian News World

Silicon Valley Bank Bankruptcy | Created with SVB assets, the bank boss calls on customers to return

Silicon Valley Bank Bankruptcy |  Created with SVB assets, the bank boss calls on customers to return

(NEW YORK) The boss of Silicon Valley Bridge Bank, the entity created by US regulators after the bankruptcy of Silicon Valley Bank (SVB), on Tuesday called on customers to return their deposits to the institution. Banks are seeing customers pouring in.

SVB, which went bankrupt after massive customer withdrawals, was placed under the control of authorities on Friday, who handed over its management to the American Deposit Insurance Corporation (FDIC).

“We are doing everything in our power to rebuild, regain your trust and continue to support the innovation economy,” Tim Myopoulos, appointed Monday by the FDIC to lead the new establishment, wrote in a message.

The bank is in the process of restarting its various systems, “granting new loans and honoring existing credit solutions,” he said.

“The first thing you can do to support the future of this institution is to help us rebuild our deposit base by leaving deposits at Silicon Valley Bridge Bank and transferring deposits that have been lost over the past few days,” he appealed.

SVB’s failure on Friday, the largest bank failure in the United States since 2008, preceded Wednesday’s liquidation and forced closure of Silvergate Bank, a small regional bank that has become a favorite destination for the cryptocurrency community. Signature Bank on Sunday, 21ste Country Bank

A move to major banks

The situation will benefit big banks like JPMorgan Chase and Bank of America, which have seen an influx of customers and deposits in recent days, according to two sources familiar with the sector.

READ  Hospital meals "taste like vomit" to him, and he prefers to die at home

These firms are not actively seeking new customers from competitors on occasion, two sources said.

But they welcome customers from closed banks, which represent high amounts, one of them said.

Clients from small and medium-sized banks may also have transferred all or part of their funds to “major players that the government cannot fail in their eyes,” said Alexander Yokum, who analyzes regional banks for the firm CFRA.

However, the exits should be based on banks, their client base or their regional presence, he believes.

Alexander Yokum emphasized that the extent of the moves will only be known when banks publish their quarterly results in April or an interim report by then.

In a note, ratings agency S&P Global Ratings said it “did not see evidence that the uncontrolled deposit outflows recorded at some banks have spread to others”.

“We believe that the emergency measures announced by the Federal Reserve (on Sunday) have provided banks with additional sources of liquidity when they need them and also reduced the likelihood that the confidence issue will become a problem for a large number of banks”, it added.

On Thursday alone, after selling a portfolio of financial securities for $21 billion at a loss of $1.8 billion, SVB received $42 billion in withdrawal orders from clients alarmed by the bank’s desire to quickly replenish its liquidity by raising capital.

In a stock filing on Tuesday, SVB said Goldman Sachs is the buyer of the portfolio.

The FDIC guarantees that all bank customers have access to all of their funds, including those above the usual $250,000 limit, before filing for bankruptcy.

READ  Appointment Abroad: Cross stations for nurses trained abroad

About The Author