Uncategorized
Failed Silicon Valley Bank clients will get their savings back after all
The US government took emergency steps today in an attempt to prevent more instability among banks after the historic failure of Silicon Valley Bank, assuring clients of the failed institution they would be able to recover all their money quickly.
The announcement came amid fears that the factors that caused the California-based bank could spread, and only hours before trading began in Asia.
Regulators had worked all weekend to try and come up with a buyer for the bank or broker another intervention, and as another bank, Signature Bank, was shuttered.
READ MORE: Is the most banned book in US about to be banned here?
The Treasury Department, Federal Reserve and FDIC said today that all Silicon Valley Bank clients will be protected and have access to their funds and announced steps designed to protect the bank's customers and prevent more bank runs.
"This step will ensure that the US banking system continues to perform its vital roles of protecting deposits and providing access to credit to households and businesses in a manner that promotes strong and sustainable economic growth," the agencies said in a joint statement.
Regulators had to rush to close Silicon Valley Bank, a financial institution with more than $300 billion in assets, on Friday when it experienced a traditional run on the bank where depositors rushed to withdraw their funds all at once.
It is the second-largest bank failure in US history, behind only the 2008 failure of Washington Mutual.
READ MORE: Rapper dies after alarming video at concert
Some prominent Silicon Valley executives feared that if Washington didn't rescue the failed bank, customers would make runs on other financial institutions in the coming days.
Stock prices plunged over the last few days at other banks that cater to technology companies, including First Republic Bank and PacWest Bank.
Among the bank's customers are a range of companies from California's wine industry, where many wineries rely on Silicon Valley Bank for loans, and technology startups devoted to combating climate change.
READ MORE: Grocery bills swell to record highs
READ MORE: Man found dead after 10-hour Queensland siege
Sunrun, which sells and leases solar energy systems, had less than $80 million of cash deposits with Silicon Valley Bank as of Friday and expects to have more information on expected recovery in the coming week, the company said in a statement.
Startups can't get money from Silicon Valley BankTech startups are facing serious financial trouble after the failure of Silicon Valley Bank. Regulators rushed Friday to seize the assets of the nation's 16th largest bank after depositors rushed to withdraw their money.
Stitchfix, the popular clothing retail website, disclosed in a recent quarterly report that it had a credit line of up to $100 million with Silicon Valley Bank and other lenders.
Sign up here to receive our daily newsletters and breaking news alerts, sent straight to your inbox.
