US government intervenes in Silicon Valley Bank

The United States Department of Financial Protection and Innovation intervened this Friday in Silicon Valley Bank (SVB) and appointed the CFSD as custodian of the bank's deposits

The Federal Deposit Insurance Corporation (CFSD) intervened this Friday in Silicon Valley Bank (SVB), a financial institution that concentrates a large number of clients among technological ‘startups’.

Customer withdrawals due to rumors about the bank’s solvency problems caused the entity to collapse, which was finally intervened by the California Department of Financial Protection and Innovation, which has culminated in the closure and subsequent assignment of the CFSD as custodian of the deposits.

According to the custodian entity, “deposits of less than 250,000 dollars (234,679 euros) are protected and will be accessible this Monday morning. Regarding figures greater than this amount, clients were advised to contact the agency as soon as possible.

Silicon Valley Group shares on the stock market plummeted 60 %. On the other hand, it is speculated that the SVB would be in negotiations for its sale, after several attempts to raise capital.

While in the United States they remain in expectation regarding the consequences of this intervention, the Bank of the United Kingdom issued an insolvency order on Saturday for the SVB’s subsidiary in the country, and to be able to guarantee its clients the collection of funds until the limit established by the authorities.


With information from international agencies and media

(Reference image source: Alexander Grey, Unsplash)

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