Media reports that Silicon Valley Bank employees are returning some of the money after a period of uncertainty.
The uncertain status concerned funds that were withheld from the salaries of employees of a financial institution for the purchase of shares of SVB Financial Group, but were not used for this purpose by the time of the bank’s bankruptcy on March 10.
Employees whose funds were withheld as part of the financial initiative were not sure that they would be able to return the money. The total amount of these funds amounted to $ 25 million. There was also no certainty about which of the owners of financial institutions, current or previous, would be responsible for resolving this issue.
On Tuesday, the Federal Deposit Insurance Corporation (FDIC) ruled that the money of bank employees should be defined as insured deposits. This status means the need for a refund.
Before the bank’s bankruptcy, Silicon Valley Bank employees could participate in a plan under which they were allowed to buy shares of SVB Financial Group at a discount every six months. Since the money was withdrawn from the salaries of participants when buying shares every six months, the funds accumulated for three months, from the beginning of the year until the March bankruptcy.
For several weeks after the collapse of the Silicon Valley Bank, employees of the financial institution did not have access to money. The status of the funds was uncertain. The refund process should start shortly, but specific dates have not yet been announced.
This news came two days after it became known that the new owner of the Silicon Valley bank, First Citizens Bank, is making efforts to control the outflow of deposits and is taking measures to prevent bankers from switching to the side of competitors. The new owner is also trying to regain trust in SVB, which is at the center of the global banking crisis. The president of First Citizens Bank, Peter Bristow, announced the beginning of the path to stabilization and return to business.