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After Silicon Valley Bank (SVB) filed for bankruptcy last Friday, March 10, the Federal Deposit Insurance Corporation (FDIC) announced that it would divide the bank into two parts in order to speed up its sale.
SVB’s first auction did not go as expected; however, this week First Citizens Bank announced that it could reach an agreement with the FDIC for the purchase. What is not yet clear is whether it will acquire a part or both.
SVB was divided as follows: Silicon Valley Bridge Bank, where the largest consumer deposit is housed, and Silicon Valley Private Bank, which offers services to customers with large deposits.
The first time First Citizens submitted an offer to buy SVB it was rejectednow the 30th largest bank in the United States based in Raleigh, North Carolina, remains in negotiations.
For its part, Silicon Valley Bank was the 16th largest bank in the US. the bank was recognized for providing start-up services, For both venture capital investors and technology companies, it was learned that by early 2022, their deposits had reached $200 billion.
After its collapse, alarms went off that a financial crisis like the one in 2008 would probably ensue. Two days after its fall, Signature Bank was shut down by financial regulators in order to prevent contagion throughout the banking system.
Although the main financial regulators have announced protection and monetary measures to safeguard depositors, weeks after the collapse of SVB the Federal Deposit Insurance Corporation did not rule out its sale.
Keep reading:
- Silicon Valley Bank bankruptcy: similarities and differences of the 2008 financial crisis
- Some 186 US banks could fail just like Silicon Valley Bank, according to a study
- New York Community Bank to absorb Signature Bank, according to FDIC