Buyer Found for Silicon Valley Bank

A solution has been found for Silicon Valley Bank (SVB), the California start-up bank that went bankrupt after a bank run.

It is primarily bought by First Citizens bank, the US federal government agency FDIC (Federal Deposit Insurance Corporation) has announced.

First, Citizens will take over the most significant parts of SVB, including the deposits and loans and the seventeen bank branches. This includes 119 billion dollars in deposits and 72 billion dollars in assets. In addition, several assets (accounting for $ 90 billion) remain with FDIC.

Silicon Valley Bank was mainly active in the technology sector. The bank got into trouble because of the rising interest. This made refinancing existing loans, which had been taken out at low rates, expensive and difficult. The problems led to a bank run: customers tried to withdraw their credits en masse. The bank did not get enough cash and eventually had to be closed by the authorities.

The failure of SVB was the largest failure of an American bank since the financial crisis of 2008. It led to unrest in the financial markets and great pressure on bank shares, including in Europe.