FDIC Shuts Down SVB Financial to Repay Depositors
FDIC #FDIC
After failing to raise capital, shares of SVB Financial (NASDAQ:SIVB) plunged violently to the point where trading was halted. However, things only got worse from there as regulators have now stepped in and shut down the bank completely.
As a result, the FDIC created the Deposit Insurance National Bank of Santa Clara to transfer all insured deposits from SVB Financial in order to protect insured depositors. The insured depositors will have full access to their funds by March 13, 2023.
As for those who are uninsured, they will receive an advanced dividend payment from the FDIC by next week and a certificate for their remaining amounts while the FDIC liquidates SVB Financial’s assets. As assets are sold off, more dividend payments will be made to the uninsured depositors.
SIVB stock was enjoying a positive year-to-date performance, with shares trading at over $300 at one point. Unfortunately, that came to an abrupt end as investors rushed for the exit after the company announced that it would be raising over $1.75 billion in equity financing.
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