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FDIC Plans to Try Again to Sell Silicon Valley Bank

Another attempt to sell the Silicon Valley bank may be made in the near future.

FDIC Plans to Try Again to Sell Silicon Valley Bank

Source: Pixabay.com

The Federal Deposit Insurance Corporation (FDIC) tried to sell this financial institution last Sunday, March 12. This attempt was in vain because there was not a single buyer of the bank, whose position leaves much to be desired.

The FDIC does not perceive a failed attempt as a reason to stop efforts to sell a financial institution. The Insurance Corporation plans to hold another bargaining. This is reported by the media with reference to anonymous sources.

Representatives of the FDIC told Republicans in the Senate on March 13 that after statements by regulators that the collapse of the bank poses a threat to the entire US financial system, the relevance of the sale has increased. The corporation also announced its readiness to provide additional incentives to potential buyers but did not specify which ones.

The first attempt to sell the bank was carried out through an auction. The second attempt, about the date on which there is no information yet, will have the same format. During the auction held last Sunday, not a single major bank showed interest in concluding a deal. The main purpose of the FDIC was to raise money in order to pay off the depositors of the Silicon Valley bank.

The British division of the financial institution that collapsed was sold for 1 pound sterling to the banking giant HSBC. HSBC Group CEO Noel Quinn said the deal was of strategic importance to the giant’s UK business. He noted that the purchase of the division strengthens the commercial banking franchise and expands the ability to serve innovative and fast-growing firms, including in the technology and life sciences sectors.

HSBC also plans to invest $2.1 billion in Silicon Valley Bank UK to ensure that this division will be able to conduct business as usual.

As we have reported earlier, Silicon Valley Bank Closure Impacts Hundreds of Startups and VCs.

Serhii Mikhailov

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Serhii’s track record of study and work spans six years at the Faculty of Philology and eight years in the media, during which he has developed a deep understanding of various aspects of the industry and honed his writing skills; his areas of expertise include fintech, payments, cryptocurrency, and financial services, and he is constantly keeping a close eye on the latest developments and innovations in these fields, as he believes that they will have a significant impact on the future direction of the economy as a whole.