First Citizens To Acquire Collapsed Silicon Valley Bank
Sumaira FH Published March 27, 2023 | 07:08 PM
US bank First Citizens said Monday it has agreed to purchase all loans and deposits from Silicon Valley Bank, whose collapse this month sparked global fears about the sector
Washington, (UrduPoint / Pakistan Point News - 27th Mar, 2023 ):US bank First Citizens said Monday it has agreed to purchase all loans and deposits from Silicon Valley Bank, whose collapse this month sparked global fears about the sector.
SVB, a key lender to the tech industry since the 1980s, became the biggest US bank to fail since 2008 when regulators seized it after a sudden run on deposits.
Regulators created Silicon Valley Bridge Bank from SVB after the collapse, and that entity will be taken over by First Citizens from Monday.
First Citizens said it had agreed to purchase "substantially all loans and certain other assets, and assume all customer deposits and certain other liabilities of Silicon Valley Bridge Bank." "The transaction is structured as a whole bank purchase with loss share coverage," it said in a statement.
It said the 17 former branches of SVB will open on Monday as "Silicon Valley Bank, a division of First Citizens Bank." The US Federal Deposit Insurance Corporation (FDIC) said Sunday the transaction covers $119 billion in deposits and $72 billion in assets.
Depositors of SVB will "automatically become depositors of First Citizens Bank," added the FDIC, which will continue to insure deposits.
Along with the FDIC, the United States Treasury and Federal Reserve had set out plans to ensure SVB customers would be able to access their deposits, while the Fed introduced a new lending tool for banks in an effort to prevent a repeat of SVB's quick demise.
SVB's collapse sparked a crisis of confidence among the customers of similarly sized US banks, with many withdrawing their money and depositing it into bigger institutions seen as too big for the government to not bail them out in a crisis.
The turmoil also spread to Europe, where troubled Swiss lender Credit Suisse was taken over by UBS.
Most recently, shares in long-troubled Deutsche Bank fell heavily on Friday on the lender's surging cost of default cover, reigniting fears about a widening banking sector crisis.
Despite global contagion fears, central banks have pushed on with monetary tightening as they focus on fighting inflation -- even though the troubles in the banking sector have been linked to their rate hikes.
Related Topics
Recent Stories
Pakistan marks World Press Freedom Day
High-level Saudi business delegation due on May 5
Stocks heat up as US labour market cools
President approves Tax Laws (Amendment) Bill 2024
Implementation of merit, justice to oppressed segments top priorities: CPO
Overseas Kashmir community delegation calls on AJK President, discusses latest s ..
Govt believes in freedom of press: Amir Muqam
Labour urges UK election after Tory losses
Health authorities asked for action against alleged illegal tenders at Services ..
Spain scraps national bullfighting prize sparking debate
Lahore High Court (LHC) Chief Justice Malik Shahzad Ahmad Khan visits Rawalpindi ..
ATC extends interim bail of PTI founder in 3 cases
More Stories From Business
-
CCP approves scheme of arrangement for restructuring of PIACL
9 hours ago -
High-level Saudi business delegation due on May 5
10 hours ago -
Stocks heat up as US labour market cools
10 hours ago -
Planning minister stresses need for establishing digital corridor
11 hours ago -
Burj Solar install Pakistan´s first distributed generation Wind Power project
11 hours ago -
TEVTA’s BoD decides capacity building, adoption of frugality
11 hours ago
-
US hiring slows more than expected in sign of cooler market
11 hours ago -
Stocks heat up as US labour market cools
13 hours ago -
Stocks heat up as US labour market cools
13 hours ago -
US hiring slows more than expected in sign of cooler market
13 hours ago -
PSX turns bullish, gains 1,244 points
14 hours ago -
Finance Minister for measures to enhance tax to GDP ratio
15 hours ago