Yikes. Does anyone have an idea of which orgs have significant exposure (like Molly White's FTX contagion graph[0])? [0] https://www.mollywhite.net/etc/ftx-contagion
40% of startups just had their bank accounts cut down to $250k, so... a lot.
FDIC Takes over Silicon Valley Bank
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Re: FDIC Takes over Silicon Valley Bank
#52LMAO. Can't even believe how many people were confidently asserting that nothing was wrong yesterday. If you had more than $250k in SVB yesterday you probably just took a huge haircut.
Hundreds of startups will become illiquid as a result of SVB's collapse, and there will be major layoffs here in the next 90 days as founders realize that they lost their funds and cannot raise in the current VC environment.
Re: FDIC Takes over Silicon Valley Bank
#53some note i've been taking > To protect insured depositors, the FDIC created a new entity called the Deposit Insurance National Bank of Santa Clara, or DINB. DINB will maintain Silicon Valley Bank’s normal business hours, with banking activities resuming no later than Monday, including online banking and other services, the FDIC said. Customers with accounts in excess of $250,000 are being told to contact FDIC direcl…
So, first off, I am not very literate when it comes to the comings and goings of banking procedures, so forgive me if this is a dumb question.
Would an incident like this make other banks shore up their defenses about this sort of thing happening to them, or will more banks fall due to market conditions in general?
Re: FDIC Takes over Silicon Valley Bank
#54Only 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.
> Only 3% of deposits in the bank are FDIC insured
why is that?!
Re: FDIC Takes over Silicon Valley Bank
#55Earlier quoted context omitted.
The difference is that SVB's depositors will see most of their money back, which is the point of the FDIC taking over.
I wouldn't be too sure about that. 93% of SVB deposits are uninsured.
But SVB also has locked in assets to be auctioned off. So it's going to depend on what sorts of haircuts occur on those assets sales.
Re: FDIC Takes over Silicon Valley Bank
#56The knowledge that this would happen is why it happened in the first place. SVB execs won't take a pay cut.
Re: FDIC Takes over Silicon Valley Bank
#57So any startup which had more than $250k in SVB only has $250k left now I'm assuming? Hopefully this doesn't have a bad domino effect.
Re: FDIC Takes over Silicon Valley Bank
#58Earlier quoted context omitted.
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?
https://twitter.com/GRDecter/status/1634208652595699713
Thanks!
Re: FDIC Takes over Silicon Valley Bank
#592008 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 one…
I mean, potentially. The reality is they try to protect as much of the assets as they can and even those over 250k will probably not lose as much as they would have without the FDIC
Good luck to any companies with over 100 employees trying to make payroll and other obligations on $250k.
Re: FDIC Takes over Silicon Valley Bank
#60Heads up founders who banked with SVB - Customers with accounts in excess of $250,000 should contact the FDIC toll-free at 1-866-799-0959