Silicon Valley Bank, which experienced the second-largest bank failure in American history, has some encouraging remarks amid the chaos.
Last night, Tim Mayopoulos, the new CEO of SVB, sent an email to the bank's clients assuring them that everything is well.
SVB Is Expected To Resume Transactions In The Next Few Days
SVB, a significant lender to startups across the US since the 1980s, was shut down on Friday, Business Today writes.
It was taken over by the Federal Deposit Insurance Corporation (FDIC) after depositors began withdrawing money alarmingly quickly out of concern that the bank would soon go bankrupt.
Despite assurances from the US president, Joe Biden, global equities continued to decline on Tuesday.
As a result, SVB Financial Group and two top executives have been sued by shareholders over the failure of Silicon Valley Bank.
Following the impending collapse, Mayopoulos started working as the bank's CEO yesterday, according to the letter, a copy of which was shared on Twitter.
According to a press release from the FDIC, deposits and assets were transferred over the weekend to Silicon Valley Bank, a bridge bank run by the commission.
In an email to clients, Mayopoulos stated that Silicon Valley Bank's new and current deposits are insured by the FDIC.
However, any unprocessed wire transfers made on March 9 or 10 will need to be made again, Gizmodo notes.
"I recognize the past few days have been an extremely challenging time for our clients and our employees, and we are grateful for the support of the amazing community we serve," Mayopoulos wrote in the letter.
The new CEO also claims that depositors have complete access to their funds, and both new and old deposits are safeguarded.
In order to assist the bank get back on solid ground, Mayopoulos is drawing on his experience at home finance company Fannie Mae, which he joined in the wake of the 2008 recession.
His LinkedIn profile states that he was the CEO of Fannie Mae from 2012 until 2018 and the president of the Silicon Valley startup Blend, which offered financial institutions software.
Read More: HSBC Acquires Silicon Valley Bank for Just £1 - Are Deposits Protected?
The SVB Is Also Getting Sued
On March 10, Silicon Valley Bank was closed down as a result of customers taking money out to weather the current economic unrest, Gizmodo details.
In 2023, Silicon Valley Bank became the first FDIC-insured bank to fail after making the decision to sell its investments at a loss, which scared customers into withdrawing additional cash.
Although the government intervened, Treasury Secretary Janet Yellen said that it did not utilize taxpayer funds and did not save shareholders, some debt holders, or senior management.
It can be remembered that the bank's shareholders charged Greg Becker, CEO of SVB Financial Group, and Daniel Beck, CFO, with hiding the increase in interest rates.
The lawsuit filed on Monday says that this makes the SVB particularly susceptible to a bank run, as per a report by The Guardian.
It seems to be the first of numerous lawsuits that are almost certainly going to be filed about the demise of SVB, which US officials seized on March 10 after a spike in deposit withdrawals.
The announcement came as the impact of the SVB collapse continued to shake global bank stocks on Tuesday.
It also came with calls for calm from Biden and other politicians failing to soothe the markets and leading some analysts to reevaluate their outlook on interest rates.
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