California banking regulators have on Friday closed down Silicon Valley Bank Financial Group, making it the largest bank failure since the financial crisis.
According to Reuters, the regulatory body immediately made moves to protect depositors at the startup-focused lender.
The Federal Deposit Insurance Corporation was appointed receiver by the regulator, placing the tech-heavy lender into receivership and directing the sale of its assets, according to a statement.
The FDIC said, “Silicon Valley Bank is the first FDIC-insured institution to fail this year.”
It was reported that Almena State Bank in Kansas was that last FDIC-insured institution to close, which was on October 23, 2020.
According to a statement from the FDIC, Silicon Valley Bank’s main office and all of its branches will reopen on March 13 and all insured depositors will have complete access to their protected deposits by Monday morning.
Reuters reported that employees in the tech industry who depended on the bank for their payments were concerned about receiving it.
Following this, Customers were instructed to call a toll-free number by a Scotch-taped note at a San Francisco SVB branch.
Silicon Valley Bank, also known as SVB, was not immediately available for comment.
The CEO of Cato Digital, Dean Nelson, was on a line outside of SVB Santa Clara headquarters, hoping to get answers.
He said, “If you’re all here and things are locked up, it’s very difficult to operate your company.”
“But they just came out to tell us the bank is shut down,” he added.
According to Reuters, the FDIC stated that it would try to sell SVB’s assets and dividend payments would be made to uninsured depositors in the future.