Silicon Valley Bank: Banking crisis in America, will the world see the day of 2008 again?
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The Federal Deposit Insurance Corporation has been appointed as the receiver of the bank. The FDIC said the Silicon Valley bank’s main office and all branches will reopen on March 13 and all insured depositors will have full access to their insured deposits as of Monday morning.
The banking crisis has come to the fore once again in America. US regulators have ordered the closure of Silicon Valley Bank, one of the largest banks in the country. Along with this, the Federal Deposit Insurance Corporation has been appointed as the receiver of the bank. The FDIC said the Silicon Valley bank’s main office and all branches will reopen on March 13 and all insured depositors will have full access to their insured deposits as of Monday morning. But 89% of the bank’s $175 billion in deposits were not insured by the end of 2022, according to the FDIC, and their fate is yet to be determined.
FDIC appointed receiver of the bank
The California Department of Financial Security and Innovation shut down Silicon Valley Bank on Friday. The regulator appointed Federal Deposit Insurance Corp as receiver. Companies such as video game maker Roblox Corp RBLX.N and streaming device maker Roku Inc (ROKU.O) said they had hundreds of millions in bank deposits. This is the second time in about two and a half years that the FDIC insured bank has closed. Earlier in October 2020, Almena State Bank was also locked.
Worries of other banks increased
Silicon Valley Bank is smaller than the largest banks in the country and is the 16th largest bank in the country. Its $209 billion in assets equals JPMorgan Chase’s more than $3 trillion. But a bank run can happen when customers or investors panic and start withdrawing their deposits. Perhaps the most immediate concern this weekend was whether the failure of the Silicon Valley bank would scare away customers of other banks.
When will banking activities start
Banking activities will resume from March 13, including online banking and other services. Official checks at Silicon Valley Bank will keep clearing. Under the Federal Deposit Insurance Act, the FDIC can create a DINB to ensure that customers have access to their insured funds. The FDIC, as receiver, will retain all of Silicon Valley Bank’s assets for later disposal.
2008 will come again
People are starting to remember 2008 after the closure of Silicon Valley Bank. In the year 2008, America had to go through the biggest banking crisis due to the banking firm Lehman Brothers. Not only America, the whole world was in the grip of recession.
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