SANTA CLARA, CALIFORNIA - MARCH 10: People line up outside of the shuttered Silicon Valley Bank (SVB) headquarters on March 10, 2023 in Santa Clara, California. Silicon Valley Bank (Photo by Justin Sullivan/Getty Images)
Santa Clara, California. – This Friday, California banking regulators shocked everyone by shutting down SVB Financial Group Bank, the biggest bank failure since the financial crisis. This sudden event caused the global banking sector to lose billions of dollars in market value.
The Federal Deposit Insurance Corporation (FDIC) was appointed as receiver and will be in charge of liquidating the assets of the technology bank. This is the first FDIC-insured bank to close its doors this year, and the last FDIC-insured institution to close was Almena State Bank in Kansas on October 23, 2020.
The news was worrisome for many tech workers whose paychecks depended on SVB Financial Group Bank. The bank’s San Francisco branch even had to tape a note to the door informing customers to call a toll-free number.
Clients worried about access to cash and the bank’s ability to pay employees and break even. The FDIC reported that all Silicon Valley Bank branches will reopen on March 13 and all insured depositors will have full access to their insured deposits no later than Monday morning.
The closure of the SVB Financial Group Bank has been a severe blow to the banking sector, and some predict more pain for the sector in the coming days. However, US Treasury Secretary Janet Yellen expressed “full confidence” in the ability of bank regulators to respond to the situation.
It is important that all customers of FDIC-insured banks make sure that their money is within the FDIC’s limits and rules. “Even during times when there are few or no bank failures, you should always make sure your money is safe,” said Matthew Goldberg, an analyst at Bankrate.