US authorities take control of Silicon Valley Bank

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The American authorities announced on Friday that they had closed Silicon Valley Bank, a bank close to the tech community which suddenly found itself in difficulty, and had entrusted the control of deposits to the American agency responsible for guaranteeing them.

Thunderbolt in California: the descent into hell of the Silicon Valley Bank, close to the tech world, ended with its closure by the American authorities on Friday, March 10. The control of its deposits has been entrusted to the American agency responsible for guaranteeing them (FDIC), which intends to reopen on Monday the 17 branches of the bank, located in California and Massachusetts.

The FDIC also plans to allow customers to withdraw up to $250,000 in the short term, the amount usually guaranteed by the agency. Those with more in their bank accounts, which is the vast majority of the bank’s customers, are advised to contact the branch.

It was the California Office of Financial Protection and Innovation (DFPI) that officially took possession of the establishment, citing “its lack of liquidity and insolvency”.

The 16e american bank

It has entrusted its management to the FDIC, which has created, for this purpose, a specific entity which will manage the bank’s assets, withdrawals, outstanding loans, etc.

At the end of 2022, the bank had $209 billion in assets and about $175.4 billion in deposits, authorities said. Little known to the general public, she was still the 16e US bank by asset size.

Based in Santa Clara, Calif., Silicon Valley Bank had specialized in the technology sector, primarily doing business with clients with funds from venture capital or private equity firms.

The latter facing their own difficulties between rising interest rates and the turmoil in tech, they have, in recent months, withdrawn a lot of money from their accounts.

To have enough liquidity, Silicon Valley Bank announced on Wednesday evening that it was seeking to raise capital quickly. In the process, it had lost 60% Thursday on the New York Stock Exchange and its title had been suspended Friday before the start of the session.

With AFP

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