In a step aimed at protecting the US economy by strengthening public confidence in the country’s banking system, the Biden administration has announced that depositors of the failed Silicon Valley Bank will have access to their money from Monday.
“The depositors will have access to all their money starting Monday, that is, March 13. No losses associated with the resolution of the Silicon Valley Bank (SVB) will be borne by the taxpayer,” said a joint statement by FDIC, Federal Reserve and Department of Treasury.
According to the interagency federal statement, shareholders and certain unsecured debt holders, however, will not be protected.
After receiving recommendations from the boards of the Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve, and consulting with the president, Treasury Secretary Janet Yellen on Sunday approved actions enabling the FDIC to complete its resolution of the Santa Clara, California-based Silicon Valley Bank (SVB) in a manner that fully protects all depositors, an official statement said.
California-based Silicon Valley Bank, the 16th largest bank in the United States, was closed on Friday by the California Department of Financial Protection and Innovation which later appointed the FDIC as its receiver.
SVB was deeply entrenched in the tech startup ecosystem and the default bank for many high-flying startups; its abrupt fall marked one of the largest bank failures since the 2008 global financial crisis.
According to the interagency federal statement, shareholders and certain unsecured debt holders, however, will not be protected