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FDIC Takes over Silicon Valley Bank

fdic.gov

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Re: FDIC Takes over Silicon Valley Bank

#11

Post by game_the0ry »

2008 bear sterns vibes.

The fed's move in interests rates was bound to break something. This is the first big name and, while banks are taken over by the FDIC often and it never makes the news, this one will be especially interesting bc it is Silicon Valley Bank. Naturally, people and the media will associate with the rest of silicon valley, bringing extra scrutiny to every brand name tech company, especially the ones that are still barely profitable.

And any accounts over $250K, poof.

Edit - this has been the first fdic takeover since 2020, so no, it does not happen often.

Re: FDIC Takes over Silicon Valley Bank

#13

Post by ncallaway »

NordSteve wrote: post #5

Only 3% of deposits in the bank are FDIC insured; other depositors will need to wait for the receivership process to run to get access to (what remains) of their deposits. edit: replace "bankruptcy" with "receivership" as the latter is usually a faster process than the former.

Where'd you get the 3% figure? The only thing I saw in the article was that it was not determined.

> 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.

Is the 3% figure from SVB or an estimate from another source?

Re: FDIC Takes over Silicon Valley Bank

#16

Post by tarr11 »

rvz wrote: post #4

Oh dear. It guess this is how the VC pyramid scheme collapses. $151BN uninsured deposits in the bank. [0] Now all those unprofitable startups will be falling like dominoes as now the money is tied up in the bank with withdrawals disabled. [0] https://twitter.com/FedGuy12/status/1634038788468113408

Does this mean that SVB customers are going to lose deposits over the FDIC limit (250k?)

Re: FDIC Takes over Silicon Valley Bank

#17

Post by khuey »

PascLeRasc wrote: post #6
mkmk wrote: post #2

Oldie but goodie on what actually happens when a bank is taken over. https://www.npr.org/2009/03/26/102384657/anatomy-of-a-bank-t...

That's fascinating. I'd love to watch a documentary about that.

This 60 minutes segment from the Great Recession is the closest thing I know of to that. https://www.youtube.com/watch?v=TAE8i40A5uI

Re: FDIC Takes over Silicon Valley Bank

#18

Post by Octokiddie »

> At the time of closing, the amount of deposits in excess of the insurance limits was undetermined.

What are the insurance limits for companies? Same as individuals? I get the sense that most of SVB's deposits were from startups and small companies. And I also get the sense that $250K is not much room for a startup trying to make payroll to employees with Silicon Valley wages.

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