WASHINGTON, March 11 — Silicon Valley Bank’s (SVB) high level of uninsured deposits helped kick off the run that led to the bank’s closing down, and now any of those...
WASHINGTON, March 11 — Silicon Valley Bank’s high level of uninsured deposits helped kick off the run that led to the bank’s closing down, and now any of those depositors will need to hold their breath to see if bank regulators can recover enough to make them whole.
SVB Financial Group’s Silicon Valley Bank had a relatively high amount of uninsured deposits as it courted tech workers and venture capital firms. The FDIC said yesterday the amount of uninsured deposits at the bank was “undetermined,” likely complicated by the rush of bank customers to remove uninsured funds. But data submitted to the FDIC by the bank at the end of 2022 showed that 89 per cent of its US$175 billion in deposits were uninsured.
Regulatory experts say account holders with uninsured funds are not typically individuals. Usually, accounts with such high funds are companies that need cash on hand for payroll and other expenses. But Silicon Valley Bank’s relatively well-off clientele could be the exception, and the push for full repayment was already coming from some corners.
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