Silicon Valley Bank Seized by FDIC
Silicon Valley Bank (SVB), a leading US bank that primarily serviced customers in the technology industry, has been shut down by regulators and its assets seized by the Federal Deposit Insurance Corporation (FDIC). This marks the largest US bank failure since the 2008 global financial crisis.
The FDIC has created the Deposit Insurance National Bank of Santa Clara to hold the insured deposits from SVB, which will continue to clear checks. The main office and all branches of SVB will reopen on March 13, and insured depositors will have full access to their deposits no later than Monday morning. However, it is unclear how larger accounts or credit lines for companies will be impacted by the closure as FDIC’s standard insurance covers up to $250,000 per depositor.
Twitter CEO Elon Musk Open to Buying SVB
Amidst the turmoil, Razer CEO Min-Liang Tan suggested that Twitter should consider buying SVB and turning it into a digital bank. This suggestion caught the attention of Twitter chief Elon Musk, who responded positively, saying that he is open to the idea.
This potential acquisition could mark Twitter’s entry into the fintech space, as the company has been exploring ways to expand its business. By acquiring SVB, Twitter could leverage its large user base and strong brand to establish itself as a major player in the digital banking industry. As of writing this story, there’s no official confirmation or further information regarding this comment from the billionaire.
SVB specialized in financing start-ups and had become the 16th largest US bank by assets, with $209 billion in assets and approximately $175.4 billion in deposits. The bank’s problems were sparked by customer withdrawals that led the company to liquidate securities positions whose values had plummeted due to the Federal Reserve’s interest rate hikes. Its rapid collapse has left markets rattled, and the FDIC will seek to liquidate its assets while insured depositors will receive an advanced dividend and potential additional dividend payments as the regulator gradually sell SVB’s assets.
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