• The US Federal Deposit Insurance Corporation (FDIC) is looking to make another attempt at auctioning assets of collapsed Silicon Valley Bank (SVB).
• FDIC has more flexibility to sell SVB’s assets after regulators labeled the bank’s collapse a threat to the financial system.
• California regulators shut down SVB on March 10, and HSBC UK Bank acquired the lender’s UK subsidiary for just £1 ($1.21).
FDIC Plans Second Auction For Collapsed SVB
The US Federal Deposit Insurance Corporation (FDIC) is making another attempt at auctioning off the assets of the collapsed Silicon Valley Bank (SVB). After regulators declared that the bank’s collapse was a threat to the financial system, it gave FDIC more room to offer incentives such as loss-sharing agreements for potential buyers.
California Regulators Close Down SVB
California regulators shut down SVB on March 10th, and FDIC took control of its assets in order to protect insured depositors. The agency created Deposit Insurance National Bank of Santa Clara (DINB), and transferred insured deposits of SVB to DINB. All insured depositors were able to have access to their funds by March 13th.
First Auction Attempt Fails
The FDIC started auctioning process of SVB’s assets on March 11th, but failed to find a buyer for it by the next day, when bids were due. Major US banks did not offer any bids for the lender, while an offer from another institution was also rejected by FDIC.
HSBC UK Banks Acquires SVBs UK Subsidiary
Following this failure, HSBC UK Bank acquired SVBs UK subsidiary for just £1 ($1.21). United States President Joe Biden also said that US taxpayers would not bear losses resulting from collapse of both SVB and Signature Bank.
Timetable For Next Auction Unknown
A set timetable for the next auction remains unknown at this time as FDIC plans its second attempt at selling off assets of collapsed Silicon Valley Bank (SVB).