U.S. FDIC shifts SVB deposits to new bridge bank, names CEO
7:36 am Monday, March 13th, 2023
(Reuters) -The U.S. Federal Deposit Insurance Corporation has transferred all deposits of Silicon Valley Bank to a newly created bridge bank and all depositors will have access to their money beginning Monday morning, the financial regulator said.
In a statement, the FDIC said all customers of SVB would automatically become customers of the bridge bank, which will hold “normal banking hours and activities, including online banking.”
The regulator has also tapped former Fannie Mae head Tim Mayopoulos as the chief executive officer of the newly created entity, named Silicon Valley Bank N.A., it said.
“All depositors of the institution will be made whole,” FDIC said, adding that no bank losses would fall on U.S. taxpayers.
“These actions will protect depositors and preserve the value of the assets and operations of Silicon Valley Bank, which may improve recoveries for creditors and the DIF,” it added.
The move comes as regulators and the White House aim to shore up confidence in the banking sector after regulators shuttered the startup-focused lender SVB on Friday, following a run on its deposits that created a dearth of capital.
The collapse of SVB, the biggest bank to fail since the financial crisis of 2008, has crippled stocks and triggered concerns of a contagion throughout global markets.
Oppenheimer, in a note to investors on Monday, said that the collapse was likely to drive deposits to larger “safety” banks.
U.S. President Joe Biden is scheduled to address the issue after 8 a.m. (1200 GMT).
(Reporting by Susan Heavey in Washington; Additional reporting by Mahnaz Yasmin and Rishabh Jaiswal in Bengaluru; editing by John Stonestreet, Louise Heavens and Chizu Nomiyama)
