FDIC Plans Second SVB Auction After Failed Attempt
• The US Federal Deposit Insurance Corporation (FDIC) is looking to make another attempt at auctioning assets of collapsed Silicon Valley Bank (SVB).
• The FDIC has more flexibility to sell SVB’s assets after regulators labeled the bank’s collapse a threat to the financial system.
• HSBC UK Bank acquired the lender’s UK subsidiary for just £1 ($1.21), and President Joe Biden assured that US taxpayers would not bear the losses from SVB and Signature Bank.
FDIC Attempts Second Auction After Failed First Attempt
The US Federal Deposit Insurance Corporation (FDIC) is attempting to auction off assets of collapsed Silicon Valley Bank (SVB) again, after failing to find a buyer during its first try. According to an anonymous source, this time FDIC has more flexibility in selling SVB’s assets due to it being marked a threat to the financial system by regulators. The timetable for the new auction is currently unknown.
SVB Collapse
California regulators shut down SVB on March 10th, with FDIC taking control of its assets after experiencing a bank run. To protect insured depositors, FDIC created Deposit Insurance National Bank of Santa Clara and transferred insured deposits of SVB there by March 13th. Following the collapse, HSBC UK Bank acquired SVB’s UK subsidiary for just £1 ($1.21).
FDIC First Auction Fails
The FDIC opened bids for SVB’s assets on March 11th and kept them open until March 12th but no major US bank offered a bid while an offer from another institution was rejected as well.
US Taxpayers Not Responsible For Losses
President Joe Biden assured that US taxpayers will not be held responsible for any losses resulting from the collapse of both Silicon Valley Bank and Signature Bank.
Conclusion
The second attempt at auctioning off Silicon Valley Bank’s assets by FDIC is underway but with an unknown timetable set yet. Its first attempt failed due to lack of interest from major banks while President Joe Biden affirmed that US taxpayers would not bear any losses resulting from either Silicon Valley or Signature Banks‘ collapses.