On Friday, March 10, 2023 Silicon Valley Bank (SVB) in Santa Clara, Cali., was closed by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation (FDIC) as the receiver, according to a release from the FDIC. At the time of closing, the FDIC immediately transferred to the National Bank of Santa Clara (DINB) all insured deposits of Silicon Valley Bank.
The bank had 17 branches in California and Massachusetts, as well as branches located in Canada, China, Denmark, Germany, India, Israel, Sweden and the UK. The main office and all branches of Silicon Valley bank will reopen on Monday, March 13, where the DINB will maintain Silicon Valley Bank’s normal business hours.
According to the release, as of Dec. 31, 2022, SVB had approximately US$209 billion in total assets and about US$175.4 billion in total deposits. At the time of closing, the amount of deposits in excess of the insurance limits was undetermined. The FDIC notes the amount of uninsured deposits will be determined once the organization obtains additional information from the bank and customers.
SVB was known widely as a banking system to back start-ups in the tech industry — including those in the ag tech industry. SVB notes it strove to “serve those creating positive environmental change,” as well as help startups access a world-class a range of banking, lending and investment solutions to compete globally.
“From alternative energy solutions to agricultural breakthroughs, we support individuals and businesses driving toward a healthier planet,” SVB notes on its website.
In addition, the bank notes that it had over 1,550 clients in the climate technology and sustainability sector — including clients such as Farmers Business Network, Impossible Foods, Bowery Farming and Vive Crop Protection, who previously secured debt financing from SVB.
Federal Government Remarks
On Monday, March 13, U.S. President Joe Biden addressed Americans after the Federal government seized SVB and smaller Signature Bank to ease the concerns from business owners and the general U.S. population.
Biden spoke about actions the government is taking to ensure the banking system is safe in the U.S.
“Your deposits will be there when you need them. Small businesses across the country that have deposit accounts at these banks can breathe easier knowing they’ll be able to pay their workers and pay their bills,” Biden said in the address.
But, Biden notes that the investors in the banks will not be protected.
“They knowingly took a risk and when the risk didn’t pay off, investors lose their money. That’s how capitalism works,” Biden said.
The goal of his Administration now is to reduce the risk of having this situation happen again and to prevent a repeat of 2008.
“I’m going to ask Congress and the banking regulators to strengthen the rules for banks, to make it less likely this kind of bank failure would happen again,” he said. “And to protect American jobs and small businesses.”
In Canada, Federal Finance Minister Chrystia Freeland released a statement on Twitter on Sunday, March 12 stating that the government was closely monitoring the SVB situation and are receiving regular updates. She also noted she spoke with Canadian banking leaders including the Bank of Canada and is close contact with the Canadian Office of the Superintendent of Financial Institutions who took action on Sunday evening.
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