Bank Closure Resource Page

Before SVB Financial Group bondholders can collect the billions they are owed, the bankrupt company may have to file a claim with the Federal Deposit Insurance Corp. to recover $2 billion worth of deposits trapped by the receivership of Silicon Valley Bank.

Wharton finance professor Itamar Drechsler discusses what led to the collapse of SVB and the questions it raises for banks, depositors, and regulators going forward.

 In the wake of the recent collapse of Silicon Valley Bank (SVB) and Signature Bank—and subsequent banking industry developments  in the U.S. and elsewhere—markets and the public should be reassured by the  response of federal regulators to cover depositors and to help maintain confidence and stability in the resilient U.S. banking system amid challenging economic times. That’s according to a senior regulatory compliance expert at Wolters Kluwer Compliance Solutions.

The initial panic over the Silicon Valley Bank collapse is over, but the VC-backed beauty startup landscape is now grappling with the potential long-term effects. 

Reconsideration of which banks to use to keep their businesses’ cash safe is just the beginning of founders’ concerns, as the closure of the bank could have a broader impact on the VC landscape overall, say experts. Startup beauty brands including outdoor brand Kinfield, skin-care brand Herbivore Botanicals and period health company The Flex Co. were among those banking with Silicon Valley Bank before the collapse. But the event has caused many other startup brands to rethink how and where they store their cash. 

UBS Group AG agreed to take over its longtime rival Credit Suisse Group AG for more than $3 billion, pushed into the biggest banking deal in years by regulators eager to halt a dangerous decline in confidence in the global banking system.

New York Community Bancorp, Inc. (NYCB) announced Monday that its bank subsidiary, Flagstar Bank, N.A., has acquired certain assets and assumed certain liabilities of Signature Bridge Bank from its receiver, the Federal Deposit Insurance Corp. or FDIC.

SVB Financial Group ("the Company") (NASDAQ: SIVB) today announced that it has filed a voluntary petition for a court-supervised reorganization under Chapter 11 in the United States Bankruptcy Court for the Southern District of New York to preserve value

Action by the largest U.S. banks reflects their confidence in the country’s banking system and helps ensure First Republic has the liquidity to continue serving its customers.

In less than one week, both Silicon Valley Bank and Signature Bank collapsed over the course of three days. How do these bank failures differ from what the market faced in 2008? What does it mean for the syndicated bank loan market? Host Maria Dikeos talks to Peter B. York, Adjunct Professor at Ohio State University and recently retired Managing Director and Head of large market asset-based loan originations at a major money center bank. 

Longstanding guidance to “know your borrower” is respected for good reason. The recent and unexpected upheaval in the banking and lending sector is triggering a renewed focus on financial risk management relating to borrowers and potential borrowers.

Banks and lenders need a clear understanding of the treasury-management function and risk-mitigation strategies employed by their borrowers and potential borrowers. As in previous challenging economic environments, the current uncertainty is an unpleasant, but beneficial, reminder to evaluate – or re-evaluate – these important functions and strategies. The Treasury Management Gap Analysis is an essential way to achieve this goal.

While the recent and sudden deterioration of several U.S. banks has been most impactful to the depositors, shareholders and lenders to these institutions, non-bank financial institutions, insurance companies and funds have experienced a variety of knock-on effects that, although not yet material from a rating perspective, serve to underscore the risk of financial system interconnectedness, says Fitch Ratings.

Wharton finance professor Itamar Drechsler discusses what led to the collapse of SVB and the questions it raises for banks, depositors, and regulators going forward.

Western Alliance Bancorp., Intrust Financial Corp., UMB Financial Corp., Zions Bancorp. and Comerica Inc. were the other lenders put on review by Moody’s. The credit rating company cited concerns over the lenders’ reliance on uninsured deposit funding and unrealized losses in their asset portfolios.

Signature Bank, New York, NY, was closed today by the New York State Department of Financial Services, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect depositors, the FDIC transferred all the deposits and substantially all of the assets of Signature Bank to Signature Bridge Bank, N.A., a full-service bank that will be operated by the FDIC as it markets the institution to potential bidders.

SFNet continues to assess the effects of the SVB fallout and will provide relevant information and resources as events unfold. 

To support American businesses and households, the Federal Reserve Board on Sunday announced it will make available additional funding to eligible depository institutions to help assure banks have the ability to meet the needs of all their depositors. This action will bolster the capacity of the banking system to safeguard deposits and ensure the ongoing provision of money and credit to the economy.