fdic: FDIC transfers all Silicon Valley Bank deposits to new bridge bank

To protect all depositors of Silicon Valley Bank, the US Federal Deposit Insurance Corporation (FDIC) today transferred all deposits—both insured and uninsured—and a substantial part of all all assets of the now-shut to a newly created ‘bridge bank’, which will be operated by the US agency. The FDIC also named Tim Mayopoulos as CEO of Silicon Valley Bank, N.A, the bridge bank. Mr. Mayopoulos is former president and CEO of the Federal National Mortgage Association and most recently served as president of Blend Labs, Inc.

A bridge bank assumes the deposits and certain other liabilities and purchases certain assets of a failed bank. The bridge bank structure is designed to “bridge” the gap between the failure of a bank and the time when regulators stabilize the institution and implement an orderly resolution.

FDIC said that depositors will have full access to their money beginning from today, when Siicon Valley Bank, N.A., the bridge bank, opens and resumes normal banking hours and activities, including online banking.

Depositors and borrowers will automatically become customers of Silicon Valley Bank, N.A. and will have customer service and access to their funds by ATM, debit cards, and writing checks in the same manner as before, the agency said. Silicon Valley Bank’s official checks will continue to clear and loan customers should continue making loan payments as usual, FDIC said.

Silicon Valley Bank was closed by the California Department of Financial Protection on Friday, a move which sent rippled across the globe, and the FDIC was appointed receiver.

Over the weekend, US authorities took extraordinary measures to shore up confidence in the financial system after the collapse of Silicon Valley Bank, including a new backstop for banks that Federal Reserve officials said was big enough to protect the entire nation’s deposits.

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To protect all depositors of Silicon Valley Bank, the US Federal Deposit Insurance Corporation (FDIC) today transferred all deposits—both insured and uninsured—and a substantial part of all all assets of the now-shut to a newly created ‘bridge bank’, which will be operated by the US agency. The FDIC also named Tim Mayopoulos as CEO of Silicon Valley Bank, N.A, the bridge bank. Mr. Mayopoulos is former president and CEO of the Federal National Mortgage Association and most recently served as president of Blend Labs, Inc.

A bridge bank assumes the deposits and certain other liabilities and purchases certain assets of a failed bank. The bridge bank structure is designed to “bridge” the gap between the failure of a bank and the time when regulators stabilize the institution and implement an orderly resolution.

FDIC said that depositors will have full access to their money beginning from today, when Siicon Valley Bank, N.A., the bridge bank, opens and resumes normal banking hours and activities, including online banking.

Depositors and borrowers will automatically become customers of Silicon Valley Bank, N.A. and will have customer service and access to their funds by ATM, debit cards, and writing checks in the same manner as before, the agency said. Silicon Valley Bank’s official checks will continue to clear and loan customers should continue making loan payments as usual, FDIC said.

Silicon Valley Bank was closed by the California Department of Financial Protection on Friday, a move which sent rippled across the globe, and the FDIC was appointed receiver.

Over the weekend, US authorities took extraordinary measures to shore up confidence in the financial system after the collapse of Silicon Valley Bank, including a new backstop for banks that Federal Reserve officials said was big enough to protect the entire nation’s deposits.

Stay on top of technology and startup news that matters. Subscribe to our daily newsletter for the latest and must-read tech news, delivered straight to your inbox.