Silicon Valley Bank in the USA went bankrupt

The US Federal Deposit Insurance Corporation (FDIC) reported that a trustee has been appointed to the Silicon Valley Bank (SVB), which caused a decline in the markets.

In a statement from the FDIC, it was stated that the SVB has been appointed by the California Department of Financial Protection and Innovation to protect deposits insured.

In the statement, it was noted that the FDIC established the Santa Clara National Bank of Deposit Insurance (DINB) to protect insured depositors, and all SVB’s insured deposits were transferred there.

In the statement, it was stated that all insured depositors will have full access to their deposits by March 13 at the latest, and future dividend payments can be made to uninsured depositors while the bank’s assets are sold.

SVB has 17 branches in California and Massachusetts, and the bank’s main office and all branches will reopen on March 13 under the control of the regulator.

In the statement, it was reported that DINB will resume normal working hours of SVB and banking activities will resume.

In the FDIC’s statement, it was stated that as of December 31, 2022, SVB’s total assets were approximately $209 billion and total deposits approximately $175.4 billion.

In the statement, it was noted that SVB was the first FDIC insured institution to go bankrupt this year.

The share price had lost more than 60 percent yesterday after the bank, which is affiliated with the SVB Financial Group, closed its $21 billion bond position with a loss of approximately $1.8 billion and announced that it would raise more than $2 billion in capital.

After some venture capital investors advised companies to withdraw their money from the bank, its operations were suspended as the bank continued to lose in the futures market.

‘One of the biggest bankruptcies since 2008’

The bankruptcy of the SVB was one of the largest recorded bankruptcies in the US since the 2008 global financial crisis. The largest such bankruptcy was experienced by Washington Mutual during the 2008 crisis.

Founded in 1983, SVB specializes in technology industry banking and often lends to startups. The bank also helped startups go public.

Considering its assets, the bank was ranked 16th among the largest banks in the USA.

The bankruptcy of the SVB had a negative impact on the stock market in the US and Europe, causing an overall decline in banking stocks.