Silicon Valley Bank’s new CEO Tim Mayopoulos has written a letter to the bank’s clients, stating that the lender is not just open, it is conducting business as usual.
“Silicon Valley Bank NA is open and conducting business as usual. We are here to serve you. I recognize that the past few days have been an extremely challenging time for our clients and our employees, and we are grateful for the support of the amazing community we serve. I have joined the company starting today,” Mr Mayopoulos wrote in the letter.
Mr Mayopoulos said that new deposits and all assets of the Silicon Valley Bank to a newly created FDIC-operated ‘bridge bank’.
“Over the weekend, the FDIC transferred all deposits and substantially all assets of the former Silicon Valley Bank to a newly created, full-service FDIC-operated ‘bridge bank’ in an action designed to protect all depositors of Silicon Valley Bank,” he said. “Depositors have full access to their money and new and existing deposits are protected.”
A ‘bridge bank’ is a chartered national bank that operates under a board appointed by the FDIC. It assumes the deposits and certain other liabilities and purchases certain assets of a failed bank. The bridge bank structure is designed to “bridge” the gap between the failure of a bank and the time when the FDIC can stabilise the institution and implement an orderly resolution.
Mr Mayopoulos added that the bank will provide more information as soon as it was available.
“I look forward to getting to know the clients of Silicon Valley Bank…I also come to this role with experience in these kinds of situations. I was part of the new leadership team that joined Fannie Mae in the wake of the financial crisis in 2008-09, and I served as the CEO of Fannie Mae from 2012-18,” Mayopoulos said in the letter.
The SVB has been a key lender to startups across the United States since the 1980s. Its overnight collapse baffled many in the tech industry.
The chaos post its fall led US President Joe Biden to reassure Americans about the country’s financial system amid worries of inflation.
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