SVB Financial Group stock remained halted Friday as the Federal Deposit Insurance Corp. took control of the troubled company in a sudden demise of the once-mighty lender to technology companies. While it’s known as a sophisticated and dependable lender in Silicon Valley, the company
succumbed to an old-fashioned run on the bank when it told investors on Thursday that it needed to raise $2.25 billion to cover an unexpected drop in deposits.
In the largest demise of a U.S. bank since the 2008 financial crisis, the Federal Deposit Insurance Corp. renamed the bank Deposit Insurance National Bank of Santa Clara as it took control of SVB Financial on Friday. The bank has issued no formal comments. The main office and all branches of Silicon Valley Bank will reopen on Monday, the FDIC said. The Federal Reserve, meanwhile, noted it’s keeping an eye on the situation. See: Washington is watching Silicon Valley Bank but does not see current troubles as systemic – bank analysts “We believe the failure is more about Silicon Valley’s unique business model than it is about broader problems in the banking system,” analysts at TD Cowen said. “We continue to expect regulators to revamp liquidity rules in response to this failure, but do not expect any change for how most banks treat unrealized losses.” Brian Bethune, economics professor at Boston College, said the SVB Financial made a “classic signaling problem” when it an …