The US Federal Deposit Insurance Corporation (FDIC) on Monday decided to break up Silicon Valley Bank (SVB) and hold two separate auctions for its traditional deposits unit and its private bank after failing to find a buyer for the failed lender last week.
It will seek bids for Silicon Valley Private Bank until March 22 and for the bridge bank until March 24. The private bank, which is housed within SVB’s retail operations, caters to high net worth individuals. Bank and nonbank financial firms will be allowed to bid on the asset portfolios, the regulator said.
Last week, sources said FDIC was planning to relaunch the sale process for SVB, with the regulator seeking a potential breakup of the failed lender.
Value of Secrecy
SVB’s collapse and the ensuing market chaos could have been mitigated if its lastgasp $1.3billion stock offering had been more fully negotiated in secret, dealmakers said. Private negotiations allow companies to share nonpublic information with potential investors before announcing funding plans.
SVB’s unsuccessful equity raise on March 10 marked a key point for investors, who began to realise that there could be much broader problems in the banking system. During the next two sessions, the KBW Bank Index plunged 15% for its worst twoday stretch since the pandemic hit in March 2020.
It will seek bids for Silicon Valley Private Bank until March 22 and for the bridge bank until March 24. The private bank, which is housed within SVB’s retail operations, caters to high net worth individuals. Bank and nonbank financial firms will be allowed to bid on the asset portfolios, the regulator said.
Last week, sources said FDIC was planning to relaunch the sale process for SVB, with the regulator seeking a potential breakup of the failed lender.
Value of Secrecy
SVB’s collapse and the ensuing market chaos could have been mitigated if its lastgasp $1.3billion stock offering had been more fully negotiated in secret, dealmakers said. Private negotiations allow companies to share nonpublic information with potential investors before announcing funding plans.
SVB’s unsuccessful equity raise on March 10 marked a key point for investors, who began to realise that there could be much broader problems in the banking system. During the next two sessions, the KBW Bank Index plunged 15% for its worst twoday stretch since the pandemic hit in March 2020.
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