Silicon Valley Bank's high level of uninsured deposits helped kick off the run that led to the bank's closing down, and now any of those depositors will need to hold their breath to see if bank regulators can recover enough to make them whole.
All insured deposits will be accessible in full no later than Monday morning, but the FDIC said uninsured depositors will get a “receivership certificate,” and that future dividend payments “may be made” to pay off uninsured funds as the bank’s assets are sold. Customers with uninsured deposits were told to call the FDIC.
Regulatory experts say account holders with uninsured funds are not typically individuals. Usually, accounts with such high funds are companies that need cash on hand for payroll and other expenses. But Silicon Valley Bank’s relatively well-off clientele could be the exception, and the push for full repayment was already coming from some corners.
Beyond selling off the assets piecemeal, another possible move by the FDIC would be to find another firm to take on all or a portion of the assets. This move is typically preferred by the regulator as a smoother process that ensures depositors are minimally disrupted and usually kept whole. But that process can be lengthy, leaving uninsured depositors in the dark.
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