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Silicon Valley Bank, Part I

 


Until a few minutes ago I was under the impression that I had already written something in here about the failure of Silicon Valley Bank in March of this year.

I can't find any such post now. So ... maybe not. I see a brief reference to it in an item about an FDIC regulation, but that's it.

Anyway, my apologies if I didn't. I'm am sure I have masses of lurking readers whom I've disappointed. Here is a very short statement of what happened. I will say something about its significance tomorrow. Just the facts today. 

In the early days of March there was a run on SVB. The Federal Reserve's long campaign of interest rate hikes, combined with bad managerial decisions, had caused bank losses that made depositors nervous -- hence a bank run right out of the Potterville playbook. People need their liquidity. 

On the morning of March 10, a Friday, the California Department of Financial Protection and Innovation seized SVB and put it int he receivership of the Federal Deposit Insurance Company. Nice to see state and federal officials working hand-in-hand, I suppose.

The FDIC re-opened the bank Monday, March 13, under a new name and with new leadership. It was now the Silicon Valley Bridge Bank.

SVB, then, never entered bankruptcy, but its parent corporation, SVB Financial, and a lot of sister companies of the bank under the same corporate umbrella, did seek bankruptcy court protection, raising issues still being litigated. 

Those are the bare bones. Some interpretive skin tomorrow. 



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