First Citizens Banks signs a deal to receive all deposits and loans Bank of Silicon Valley, as reported this morning by the Federal Deposit Insurance Corporation (FDIC). “Silicon Valley Bridge Bank, 17 former branches of the National Association, will open as First Citizens Bank & Trust Company on Monday, March 27, 2023,” the regulator said in a statement. Bank customers will need to go to their existing branches “until they receive notification from First Citizens Banks that their system transformation has been completed to provide complex service at all their other branches.”
US authorities, after two weeks of intense searching to find a buyer, managed to get this regional bank headquartered in Raleigh (North Carolina) authorized. Take over $72 billion in assets At a discount of 16,500 million from Silicon Valley Bank. As of March 10 this year, the U.S. Deposit Guarantee Fund said the Bank of Silicon Valley had total assets of $167 billion and deposits of approximately $119 billion. Approximately $90 billion in securities and other assets will remain at the disposal of the FDIC as creditors.
Regulator gains discretion over First Citizens common stock approx $500 million. The FDIC and First Citizens Banks agreed to “loss-sharing” clauses on business loans bought-from-acquired. Officials hope this cooperation will “maximize the recovery of assets by being held in the private sector” and minimize “cuts for loan customers”.
According to the estimates of the deposit guarantee fund, Silicon Valley Bank’s failure cost about $20,000 millionhowever, the exact cost will be determined when you finish the credit. Meanwhile, “Silicon Valley bank” depositors will automatically become First Citizens Bank depositors, meaning all deposits taken over by the regional bank “will remain FDIC insured up to the insurance limit.”
Extension of deposit guarantees
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The decline of Silicon Valley Bank and Signature Bank still worries the US financial industry, and therefore country officials. Although, when the bankruptcy of the financial institution became known, the regulators announced only protect deposits under $250,000 millionnow, with the turmoil caused by Credit Suisse and doubts about First Republic Bank, he could broaden that view.
Janet Yellen, the country’s secretary of the Treasury Department, noted last week: Larger collateral will be given to deposits of smaller banks as needed.. “Large banks play an important role in our economy, but so do small and medium banks,” he said on Tuesday. .
Source: Informacion
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