ECONOMY

Wed 15 Mar 2023 8:38 am - Jerusalem Time

The head of the bank, the guardian of the collapsed “Silicon Valley Bank”, urges depositors to return

The head of the " Silicon Valley Bridge Bank ", which was newly established by the US banking authorities and transferred to him all the deposits of the collapsed "Silicon Valley Bank", on Tuesday, urged all customers to return with their withdrawn money at a time when large banks are witnessing an influx of deposits.


Silicon Valley Bank, the main lender to startups in the United States since the 1980s, collapsed after a sudden rush to withdraw deposits, prompting regulators to seize it on Friday.


"The number one thing you can do to support the future of this institution is to help us rebuild our deposit base," Tim Myopoulos, CEO of Silicon Valley Bridge Bank, said in a statement. Deposits that were withdrawn during the past days.


"We are doing everything we can to rebuild, earn your trust again, and continue to support the innovation economy," he added.


The Federal Deposit Insurance Corporation confirmed that it will cover all depositors in the "Silicon Valley Bank", even over the limit of $ 250,000 in the protected deposit.


Myopoulos noted that Bridge Bank offers "new loans and fully respects existing credit facilities."


The bankruptcy of “Silicon Valley Bank” on Friday, the largest collapse of an American bank since 2008, was preceded by the liquidation of “Silvergate” Bank on Wednesday, the bank preferred by the cryptocurrency community.


On Sunday, the US authorities forced Signature Bank, which ranks 21st in size, to close.

Large banks such as JPMorgan and Bank of America are witnessing an influx of deposits, according to two sources close to the banking world.


One of them added that while large institutions do not seek out potential clients fleeing closed banks, they do accept deposits, which are now large sums.


Clients of small and medium-sized banks may also have transferred all or part of their money "to major players who think the government will in no way accept to let them down," said Alexander Yocum, a banking analyst at research firm CFRA.


Yokom added that the size of the transfers would likely only be known when the banks publish their quarterly results from April, or if they publish interim reports before then.


Standard & Poor's, a credit ratings agency, said in a note that it "saw no evidence that uncontrollable deposit outflows that occurred in a small number of banks spread widely" to other banks.


In a joint statement Sunday, the US Federal Reserve, the Federal Deposit Insurance Corporation and the US Treasury said that depositors in the “Silicon Valley Bank” will be able to access “all their funds” starting from Monday.


The Federal Reserve also announced that it will provide additional funding to banks to help them meet the needs of depositors.


Standard & Poor's added that it believed the Fed's actions "provided banks with additional sources of liquidity if needed, and may have also reduced the likelihood that highly sensitive confidence issues would reach more banks."

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The head of the bank, the guardian of the collapsed “Silicon Valley Bank”, urges depositors to return

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