California regulators urgently shut down Silicon Valley Bank, taken over by the FDIC to protect depositors, the first case since 2020.

The regulatory authorities in California, USA issued an announcement declaring the closure of Silicon Valley Bank SVB, which has recently incurred significant losses and sought financing, with the Federal Deposit Insurance Corporation (FDIC) taking over. All FDIC-insured deposits from Silicon Valley Bank are being transferred to Santa Clara Deposit Insurance National Bank (DINB).

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FDIC Takes Over Silicon Valley Bank

The announcement stated that all depositors will have access to their insured deposits by Monday morning, March 13th, and uninsured depositors will receive dividends next week; funds beyond the insurance limit will receive certificates which may be paid dividends in the future as FDIC sells Silicon Valley Bank's assets to uninsured depositors.

Silicon Valley Bank, with 17 branches in California and Massachusetts, will reopen on March 13th, with the Santa Clara Deposit Insurance National Bank (DINB) maintaining its regular operations. FDIC will continue to liquidate Silicon Valley Bank's assets to ensure users can access funds within their insured limits.

FDIC insures up to $250,000 per depositor, and it urges customers with amounts exceeding this to contact them proactively; the exact amount exceeding the insurance limit before the closure is not confirmed at this time.

First Receivership of a Failed Insured Bank in 2020

FDIC stated that Silicon Valley Bank is the first failed insured institution taken into receivership by FDIC this year. The previous one was Almena State Bank, closed on October 23, 2020.