US government says Silicon Valley Bank depositors can get their cash on Monday
A related question is whether any other financial institution will step in to SVB’s role as a VC-and-startup-friendly institution willing to take on the substantial risks posed by early-stage companies that burn cash at a furious rate as they try to commercialize new technologies.
A deeper concern is whether SVB’s woes are symptomatic of widespread problems across the US banking sector, because the US government’s joint announcement also revealed that it’s provided similar support to New York based Signature Bank, which was closed by New York State authorities last week. The joint statement is peppered with assurances “no losses will be borne by the taxpayer.” That’s in stark contrast to 2008, when the US government poured billions into failed banks as the finance sector endured a widespread crisis. The strong signal that public funds aren’t needed to handle the mess at SVB and Signature Bank has been taken as a sign that the problems are isolated.
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