The Federal Deposit Insurance Corp. said Monday it has transferred all deposits from the former Silicon Valley bank to a newly formed full-service FDIC-operated bridge bank in a move to protect all of the bank’s depositors. .
The move comes in receivership prompted by concerns of parent SVB Financial Group, which closed the bank and 13 of its branches on Friday in response to a run on the bank.
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Bond portfolio and need to raise capital. It was the second major US bank failure since the collapse of Washington Mutual during the 2008 financial crisis.
The FDIC said Depositors will have Full access to their money from Monday morning when the bridge bank, called Silicon Valley Bank NA, opens and resumes regular operations, including online banking.
“All transfers of deposits are concluded hereunder A legitimate risk exception was approved yesterday. All of the company’s depositors will be made whole,” the FDIC said in a statement.
Tim Mayopoulos, former president and CEO of the Federal National Mortgage Association, or Fannie Mae named CEO of Silicon Valley Bank, NA Mayopoulos most recently as president of Blend Labs Inc.
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The news comes after the Federal Reserve announced a new emergency-lending program on Sunday to boost the banking system’s capacity in the wake of the Silicon Valley bank’s collapse.
Many banks are similar to the profile of Silicon Valley Bank, with bonds that have lost value as the Fed has sharply raised interest rates.
Read now: 20 banks with huge potential bond losses – SVB was
Under the new plan, banks and other lenders can pledge Treasuries and mortgage-backed securities for cash. Instead of marking properties to their current market value, banks may mortgage at par or face value.
See also: Regulators say depositors at Silicon Valley banks will get their money
The Fed’s plan comes after last week’s failure of Silvergate Capital and Sunday’s closing of crypto-friendly Signature Bank.
Even after the central bank’s action, fears about other banks were evident in a nearly 84% drop in First Republic Bank shares early Monday.
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It was leading the S&P 500
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Those who refuse. The stock was discontinued along with other banking stocks due to volatility.
First Republic said it had access to more than $70 billion in untapped liquidity after fresh support from the Federal Reserve and JPMorgan Chase & Co.
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In a deal struck over the weekend.
“First Republic’s capital and liquidity positions are very strong, and its capital is above regulatory limits for well-invested banks,” First Republic founder and chief executive Jim Herbert and chief executive Mike Roeffler said in a joint statement Sunday.
Other early banking moves included Pacwest Bancorp.
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Down 55%, and Western Alliance Bancorp.
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84% down. Comerica Inc.
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39% and Zions Bancorp down.
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32% decrease.
In Europe, Credit Suisse’s
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Shares hit new record lows, falling as much as 15%, as investors continued to hammer shares of Swiss banking giants after the collapse of US banks.
