FDIC Backs All Deposits at Silicon Valley Bank, Providing Security to Customers Amid Bank Collapse

The Federal Deposit Insurance Corporation (FDIC) has stepped in to back all deposits at Silicon Valley Bank (SVB), resolving a key uncertainty surrounding the second-largest bank failure in U.S. history. The FDIC is acting as a receiver, which typically means it will liquidate the bank’s assets.

The decision addresses concerns around the fate of uninsured funds held at the Santa Clara, California-based bank — the nation’s 16th largest — which had $209 billion in assets and more than $175 billion in deposits. SVB collapsed Friday morning after a stunning 48 hours in which a bank run and a capital crisis led to the second-largest failure of a financial institution in US history.

An FDIC official did not comment on the details to CNN, but said it is standard practice and one of the first steps the independent government agency takes after being named receiver. The U.S. Treasury, the Federal Reserve and the Federal Deposit Insurance Corporation said Sunday that the government would back Silicon Valley Bank deposits beyond the federally insured ceiling of $250,000.

US workers also received their annual bonuses on Friday, just hours before FDIC took over the collapsed lender, Axios reported. The US Federal Deposit Insurance Corporation offered Silicon Valley Bank employees 45 days of employment and 1.5 times their salary, reports say.

The FDIC’s decision to back all deposits at Silicon Valley Bank has provided a sense of security to customers of the bank and has alleviated some of the uncertainty surrounding the bank’s collapse. It is unclear what the future holds for the bank, but the FDIC’s decision to back all deposits is a step in the right direction.