Silicon Valley begins talks with prospective buyers after shutdown

One of the biggest banks in the United States, Silicon Valley Bank, has commenced talks with prospective buyers.

This came just as US regulators ordered the shutdown of the bank to avoid its total collapse.

Consequently, the regulators had taken over Silicon Valley till a new investor comes in.

The move, according to reports, is aimed at protecting customers with up to $250,000 in deposits.

Silicon Valley is experiencing a difficult time despite ending 2022 with $209 billion worth of assets and approximately $175.4 billion in deposits.

The bank has been looking to find a solution to its financial crisis on its own, but the US regulators on Friday pulled the plug on a deal with one of the potential buyers.

Washington-based Federal Deposit Insurance Corporation was appointed by the California Department of Financial Protection and Innovation (DFPI) to take over Silicon Valley’s operation.

Before its crisis, Silicon Valley has spearheaded technological innovations in the US, disbursing capital to support startups since the 1980s.

READ ALSO: Facebook parent company, Meta sacks 11,000 staff as job cuts in Silicon Valley grow

Silicon Valley’s failure is the second largest since the collapse of Washington Mutual rocked the US financial market in 2008.

As a result, the US regulators have kept a close watch on other banks in a bid to ensure the crisis has not spread to other banks in the country.

The US Treasury Secretary, Janet Yellen, told journalists at a news conference in Washington recently that the financial industry regulators have effective tools to address the crises in the sector.

“Secretary Yellen expressed full confidence in banking regulators to take appropriate actions in response and noted that the banking system remains resilient and regulators have effective tools to address this type of event,” the Treasury Department said in a statement.

Meanwhile, shares of Bank of America, Wells Fargo, and Citibank fluctuated following the announcement of Silicon Valley’s failure on Friday.

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