Bank failure that shook the world in the US

The US Federal Deposit Insurance Corporation (FDIC) reported that a trustee has been appointed for Silicon Valley Bank (SVB), sending markets tumbling.

In an FDIC statement, it was noted that the SVB has been designated by the California Department of Financial Innovation and Protection to protect insured deposits.

In the statement, it was noted that the FDIC established the Santa Clara National Deposit Insurance Bank (DINB) to protect insured depositors, and all SVB insured deposits were transferred there.

In the statement, it was indicated that all insured depositors will have full access to their deposits no later than March 13, and future dividend payments can be made to uninsured depositors while the bank’s assets are sold.

SVB has 17 branches in California and Massachusetts, and the bank’s main office and all branches will reopen on March 13 under the watchful eye of the regulator.

In the statement, it was reported that DINB will resume SVB’s normal working hours and banking activities will resume.

In the FDIC statement, it was noted that as of December 31, 2022, SVB’s total assets were approximately $209 billion and total deposits were approximately $175.4 billion.

In the statement, it was noted that SVB was the first FDIC-insured institution to file for bankruptcy this year.

ONE OF THE LARGEST BANKS SINCE THE GLOBAL FINANCIAL CRISIS OF 2008

The share price had lost more than 60 percent yesterday after the bank, which is affiliated with SVB Financial Group, closed its $21 billion bond position at a loss of about $1.8 billion and announced it would raise more than $2 billion in capital.

After some venture capital investors advised the companies to withdraw their money from the bank, their operations were suspended because the bank kept losing on the futures market.

The SVB bankruptcy was one of the largest bankruptcies recorded in the US since the 2008 global financial crisis. Washington Mutual experienced the largest bankruptcy of its kind during the 2008 crisis.

Established in 1983, the SVB mainly provided loans to start-ups. The bank also helped new companies go public.

Taking into account its assets, the bank was ranked 16th among the largest banks in the US.

The bankruptcy of SVB had a negative impact on the US and European stock markets, causing a general fall in bank shares. AA