Federal Regulators Fully Protect Silicon Valley Bank Depositors Through New Bridge Bank
Federal regulators invoke a systemic risk exception to ensure all Silicon Valley Bank depositors access their funds without insurance caps. The FDIC simultaneously transitions the failed institution into a bridge bank to maintain operations.
Federal regulators fully protect all Silicon Valley Bank depositors by invoking a systemic risk exception, effectively removing the standard $250,000 per account FDIC insurance cap. A joint statement from the Department of the Treasury, the Federal Reserve, and the FDIC confirms that customers have complete access to all their money starting today.
While depositors face no losses, shareholders and certain unsecured debtholders do not receive protection under this resolution. Additionally, the federal agencies remove the senior management team as part of the comprehensive effort to stabilize the failed financial institution.
To maintain ongoing operations, the FDIC converts the temporary Deposit Insurance National Bank of Santa Clara into a fully chartered bridge bank named Silicon Valley Bank, N.A. This bridge bank assumes the failed bank's deposits, specific liabilities, and certain assets while an FDIC-appointed board oversees the institution until a final, orderly resolution occurs.