SVB collapsed on Friday after a bank run. The US government took over the bank, but only guaranteed assets up to $250,000. Most bank balances were much higher. “The total amount of credits will be refunded,” the statement read. “Losses in the resolution of Silicon Valley Bank will not be borne by the US taxpayer.”
Strengthen the banking system
“Today we are taking decisive action to protect the US economy by building public confidence in our banking system. This move will ensure that the US banking system continues to perform its vital functions – deposit protection and access to credit for households and businesses – in a way that promotes strong and sustainable economic growth.
“Following a recommendation from the FDIC and Federal Reserve boards of directors and following consultations with the President, Secretary Yellen has approved steps that will allow the FDIC to complete the resolution of Silicon Valley Bank, Santa Clara, California, in a way that fully protects depositors. Depositors can access all their funds from Monday 13 March. No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer.”
The SVB has done a lot of business with tech start-ups. At the end of last year, SVB had over $175 billion in assets under management. Dutch biotech company Pharming also has a total of $45 million in its account with SVB. The UK government has also announced an emergency support package for start-ups that have lost their assets to SVB. This should allow them to continue paying wages and other ongoing costs. But the details are not there yet. They are not expected until Monday.