Silicon Valley Bank collapsed on 10 March 2023, when California regulators closed it and appointed the FDIC as receiver. On 8 March it announced a $1.8 billion…
Founded to bank venture-backed tech firms, it grew into the bank for nearly half of US startups.
Assets grew 271%. SVB parked deposits in long-dated bonds and mortgage securities.
Fed hikes cut bond values: about $15bn of unrealized losses by year-end, near its equity. 94% of deposits uninsured.
SVB sold $21bn of securities at a $1.8bn loss and said it would raise $2.25bn.
Customers asked to pull about $42bn, a quarter of deposits. Over $100bn more was queued.
California regulators closed SVB and named the FDIC receiver. It held about $209bn in assets.
Treasury, Fed and FDIC invoked a systemic-risk exception covering all deposits. Shareholders lost out.
First Citizens took about $72bn of assets at a $16.5bn discount. Cost to the FDIC fund: about $20bn.
The FDIC sued CEO Greg Becker and 16 others for gross negligence. A judge let the case proceed.
The FDIC keeps $1.71bn claimed by SVB's ex-parent; officers breached duties, the judge said.
A Fed-commissioned review found 96% of social media chatter came after failure was inevitable. The Fed is now regrouping supervision.
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