US regulators overseeing the emergency breakup of SVB Financial Group are racing to sell assets and make a portion of clients’ uninsured deposits available as soon as Monday.
Saleha Mohsin, Lydia Beyoud and Sridhar Natarajan
The initial payout — the amount of which is still being determined — would aim to tide over the firm’s distressed customers, many of them Silicon Valley entrepreneurs and their companies, with more cash to follow as the bank’s assets are sold. The amount will depend in part on the Federal Deposit Insurance Corp.’s progress in turning assets to cash by Sunday night.
At the end of last year, Silicon Valley Bank had more than $175 billion in deposits and $209 billion in total assets — but selling those holdings to meet demands for cash proved costly. That’s because SVB had loaded up on bonds and Treasuries that lost value as the Federal Reserve raised interest rates.
The amount of uninsured deposits was still being determined, the FDIC said on Friday. The watchdog said it will issue an advance dividend to uninsured depositors soon, with future payments later. Wall Street executives expect there will be a market for selling the rights to recoup deposits.
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