Silicon Valley Bank (“SVB”) was placed into receivership with the Federal Deposit Insurance Corporation (“FDIC”) on Friday, March 10 [link]. Federal regulators spent the weekend addressing concerns about the ramifications of SVB’s failure for SVB depositors and the economy more broadly.
On Sunday, March 12, the Department of the Treasury, the Federal Reserve, and the FDIC issued a joint statement [link] announcing the closing of Signature Bank and confirming that all deposits at both SVB and Signature Bank would be fully protected. All deposits at SVB are available to depositors as of today, Monday, March 13.
The Federal Reserve established the Bank Term Funding Program (the “BTFP”), intended to provide a backstop for banks holding government bonds, allowing those bonds to be swapped for cash for up to a year. The BTFP is intended to help other banks meet the deposit requests of their customers to avoid the liquidity problems that led to SVB’s closure [link].
Circumstances are rapidly developing for businesses having deposits and credit lines at SVB, Signature Bank, and other financial institutions. Our attorneys are actively helping clients navigate this situation and monitoring developments. Please contact DGS attorneys Adam L. Hirsch, Chris Richardson, or Kyler Burgi if we can assist in any way.