Financial services executives, as well as investors, grew increasingly concerned about the possibility of a bank failure. Silicon Valley Bank (SVB) to call one Domino effectbringing in other regional US banks in case authorities do not immediately find a buyer for SVB to protect unsecured deposits.
OUR Financial group SVB which specialized in lending to new enterprises (Startup) became the biggest bank that collapsed on Friday from 2008 financial crisiscausing unrest in the markets and blocking access to billions of dollars for businesses and entrepreneurs.
federal government agency Federal Deposit Insurance Corporation (FDIC), appointed to take over initial bank management responsibilities, will try over the weekend to find another bank ready to merge with SVB, sources briefed on the matter said Friday.
Reuters was unable to confirm whether a deal was imminent.
Some financial and banking leaders said that such a deal could be significant for any bank and would potentially require special guarantees from the relevant authorities, as well as additional subsidies for any buyer.
They are looking for solutions so that the panic does not spread.
The US Central Bank and the Federal Deposit Insurance Corporation are considering a plan to create special fund this will allow regulators to guarantee deposits to troubled banks following the unexpected bankruptcy of Silicon Valley Bank, Bloomberg reported.
The new ad hoc safety mechanism has been discussed by Fed and FDIC officials with bank leaders, and it is hoped that its creation will reassure savers and investors and reduce the risk of bank panics, the agency said, citing people familiar with the matter. , conversations.
The new scheme is part of plans to prevent the spread of panic over the health of banks focused on investing in startups. The central bank did not want to comment on the report. The FDIC did not respond to Reuters’ request for comment on the Bloomberg report.
The specialized bank collapsed as depositors, concerned about its health, rushed to withdraw their deposits. The two-day run on deposits occupied several analysts and the markets. US banks have lost 100 billion in capitalization due to development.
Reuters
Source: Kathimerini
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