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The house of money is in crisis: the US authorities close the Silicon Valley bank

The house of money is in crisis: the US authorities close the Silicon Valley bank

Status: 10/03/2023 7:44 PM

A $1 billion capital shortfall has opened up at one of the largest startup funders. US authorities seized the assets of Silicon Valley Bank. Deposits in the billions were transferred to a newly formed bank.

Silicon Valley Bank has ceased operations in the United States. The Federal Deposit Insurance Corporation seizes the assets of the big bank.

This was contributed by bank clients who withdrew their money from the American Treasury, which specializes in financing startups. The majority of clients are employees of the technology sector and venture capital-backed companies.

The insured deposit has been transferred to a special purpose entity

The Federal Public Deposit Insurance Fund said the bank has $209 billion in assets and $175.4 billion in deposits. The fact that the assets were seized in the middle of a working day in the United States demonstrated the seriousness of the situation.

Marcus Schuler, ARD San ​​Francisco, on the Silicon Valley bank closure

tagesschau24 9:30 p.m., 10.3.2023

The FDIC said the insured deposits with the Bank of California were converted into a special purpose vehicle created by the FDIC called DINB. 17 SVB branches should reopen on Monday under the direction of this DINB. Holders of insured deposits will then be able to access their deposits. Owners of uninsured deposits – in the US usually more than $250,000 – about €237,000 – must report to the FDIC and then first obtain a certificate of ownership of the funds.

Shares of the parent company fell by 70 percent

The bank’s viability was called into question this week. The bank said it would raise up to $1.75 billion to boost liquidity amid concerns about rising interest rates and the economy. CNBC reports that the plan to get more money has failed.

Shares of the bank’s parent company, SVB Financial Group, fell nearly 70 percent. Silicon Valley Bank is the sixteenth largest bank in the United States. SVB’s problems created uncertainty in stock markets around the world and caused bank stocks in particular to collapse in Europe as well.

The voluntary decision by US cryptocurrency bank Silvergate Capital had already sent shock waves through parts of the financial sector on Thursday. Silvergate has announced that it will pay back all customer deposits.

US authorities shut down troubled Silicon Valley bank SVB

Peter Muki, ARD New York, Mar 10, 2023 At 9:06 pm