More than 85% of Silicon Valley's Bank's deposits were not insured. Here's what that means for customers
. “It feels like something that never should have happened, because it’s such a trustworthy entity.” The person spoke on the condition of anonymity because they are worried about losing customers over their ties to SVB.SVB was founded in 1983 and is headquartered in Santa Clara, which sits right in the middle of Silicon Valley.
Some savvy-seeming investments that banks made two years ago have since turned sour, says John Rizzo, senior vice president, public affairs at the D.C.-based firm Clyde Group. This was a big part of SVB’s problem: $91 billion worth of Treasuries that the bank bought with customers’ deposits, “When interest rates rise and the money is tighter, you tend to find out who’s made bad bets,” he says.
The FDIC said that customers will have full access to their insured deposits up to $250,000 this coming Monday. But $250,000 is “chump change” compared to what most tech companies stashed in SBV, the founder says. They estimate that “hundreds if not thousands of companies” have millions of dollars tied up with the bank.
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