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Silicon Valley Bank Closed by California Regulator

Silicon Valley Bank was closed by the California Department of Financial Protection and Innovation, and the Federal Deposit Insurance Corporation (FDIC) was appointed as the receiver. Trading in the bank halted early in the day.

Silicon Valley Bank
Silicon Valley Bank

FDIC Protects Insured Depositors

The FDIC created the Deposit Insurance National Bank of Santa Clara to protect insured depositors. All insured deposits at Silicon Valley Bank, popular with start-ups and venture capitalists, were immediately transferred to DINB. According to an FDIC announcement, insure depositors will have access to their insured deposits by March 13.

Silicon Valley Bank Becomes First Failure of 2023

Silicon Valley Bank became the first FDIC-insured institution to fail this year, the previous being Almena State Bank, of Almena, Kansas, in 2020.

Trading in Silicon Valley Bank Halted

Trading in Silicon Valley Bank was halted shortly before 9 a.m. EST, but not before shares plunged 63% in pre-market trading. Shares dropped 60% on Thursday.

La Jolla Bank Announces Wind-Down Operations

The closure of Silicon Valley Bank comes two days after La Jolla, California-based crypto-friendly bank Silvergate announced plans to wind down operations.