California regulators close SVB and name the FDIC as the receiver to protect insured deposits; SVB ended 2022 with ~$209B in assets and $175.4B in deposits

banks, lawyers, etc — and it's a minor but not insignificant screening mechanism. https://twitter.com/... Jason Zweig / @jasonzweigwsj : If you want to create a perverse incentive for banks to become really reckless, you're on the right track. https://twitter.com/... Katie Notopoulos / @katienotopoulos : *googles “how do banks work"* Brad Hargreaves / @bhargreaves : Two, any “uninsured” balances at SVB - those above $250K - are in jeopardy. FDIC plans to pay them out “as it sells the assets of SVB”. Lots of startups exclusively banked with SVB as *this was a covenant of their debt*! Robert Smith / @bondhack : 🚨 BANK OF ENGLAND MOVESTO RESOLVE SILICON VALLEY BANK UK details only on FT w/ @LauraNoonanFT https://www.ft.com/... https://twitter.com/... Eric Newcomer / @ericnewcomer : I spoke to a major investor who said that about ten of his portfolio companies had pulled out about $1.5 billion collectively from Silicon Valley Bank. https://www.newcomer.co/... Tero Kuittinen / @teroterotero : Founders running amok on Park Avenue... thank god the cops got it under control https://nypost.com/... @zachweinberg : Only comment because ppl will confuse the 2: 1. Equity holders of SVB do not deserve a bailout. That's the risk of buying their stock. You get wiped. 2. A massive structural risk is if *depositors* face losses. US gov cannot let that happen. Puts every small bank at risk. Alistair Barr / @alistairmbarr : SVB was a special beast. It had 88% of its bank deposits NOT insured by the FDIC. That's a lot. RIP $SIVB https://twitter.com/... Amir Efrati / @amir : payroll payroll payroll payroll payroll that's the word echoing throughout silicon valley how will startups with cash stuck at SVB make payroll: https://www.theinformation.com/ ... Jessica Lessin / @jessicalessin : Man, our SF landlord just gave us a few days to get a new letter of credit. Kinda crazy. Luckily we can do right away. But further sign that no one is waiting/everyone is panicking. Taylor Lorenz / @taylorlorenz : Quite a heel turn here on the government's role https://twitter.com/... Brendan Pedersen / @brendanpedersen : “At the time of closing, the amount of deposits in excess of the insurance limits was undetermined. The amount of uninsured deposits will be determined once the FDIC obtains additional information from the bank and customers.” https://www.fdic.gov/... @business : Bloomberg's Priya Anand is outside SVB's San Francisco office, where some customers have turned up only to be redirected to its Palo Alto office https://www.bloomberg.com/... https://twitter.com/... @modestproposal1 : I think contagion risk to banks is less than the risk of a meaningful portion of the economy having an immediate and significant economic shock @mikeisaac : every thought leader in the valley is a libertarian until they need a government bailout of their startup bank Cate Long / @cate_long : US banks have ~$19.2 trillion of deposits vs ~$124 billion in the FDIC insurance fund. Let's hope the system is stable. https://twitter.com/... Karl Bode / @karlbode : government is always bad, until it's time to save us from our own speculative grift and incompetence https://twitter.com/... Charles Arthur / @charlesarthur : Never want to hear a single word of complaint about regulation from this guy ever again. https://twitter.com/... Max Kennerly / @maxkennerly : If this thread is correct—there will be large knock-on effects from a single bank mismanaging a foreseeable rise in interest rates—then we have no choice but to regulate the bejesus out of the whole banking industry. Clearly the industry can't be trusted to avoid setting fires. https://twitter.com/... Kevin Yun / @kevinyun : Contagion is real. Our payroll provider was using SVB. https://twitter.com/... @kendrawrites : I'm confused. Like that limit exists for a reason and most people don't have 250k chilling in a bank account. Is this essentially asking lower income people to bail out rich people when we can't even get student debt forgiveness https://twitter.com/... Anthony DeRosa / @anthony : Too Big to Fail, Silicon Valley edition https://twitter.com/... Alexei Oreskovic / @lexnfx : What if Sydney did this? Derek DeCloet / @decloet : What it looks like when it's over. Toronto branch of Silicon Valley Bank, 3:30 pm. https://twitter.com/... @josephpolitano : “Use promo code BANKRUN at checkout” is a better work of parody than I could ever write, incredible https://twitter.com/... Antonio García Martínez / @antoniogm : Theory: The SVB bank run is (partly) happening because their depository base is all of a few thousand startup CEOs who spend too much time on Twitter and meme'ed all this into existence. (In addition to bad risk management around their bond portfolio.) @twobitidiot : If DC was brazen enough to allow SVB and all of its depositors to fail without resolution, the tech industry could just blacklist all .gov accounts to their products. SVB will get acquired and bailed out...probably by someone like JPMorgan. If you're a startup employee, relax! Jason Goldman / @goldman : Really great thread. The rare example during this event of someone who actually knows what they're talking about. https://twitter.com/... Lulu Cheng Meservey / @lulumeservey : SVB made the responsible decision to strengthen its financial position with a cap raise. It made sense. Where things went terribly wrong was the communication, specifically: (1) WHAT they said, (2) WHO the audience was, (3) WHEN they did it, and (4) HOW they framed it. Anthony DeRosa / @anthony : Fintech startup Brex got billions of dollars in Silicon Valley Bank deposits Thursday, source says https://www.cnbc.com/... Max Fisher / @max_fisher : Pretty wild email blast I just got from an online toy store. Promo code BANKRUN (!!) https://twitter.com/... Paul Kedrosky / @pkedrosky : Larry Summers on Bloomberg TV just now: Depositors must be paid back in full, and I don't see any reason they won't be. #xp Sherrilyn Ifill / @sifill_ : Alarming. It's always sad & serious when people lose their money, so I'm assuming SNL won't do an “It's a Wonderful Life” run-on-the-bank scene parody featuring the tech start-up guys lined up to get their money..... https://twitter.com/... https://twitter.com/... Jim Roberts / @nycjim : The US gov't insures deposits up to $250,000, but Silicon Valley Bank customers with bigger balances will receive certificates for their uninsured funds, meaning they will have to wait to get their money and possibly not get all of it. https://www.nytimes.com/... https://twitter.com/... Anand Sanwal / @asanwal : yday tech investor: “I'm a fan of free markets.” today tech investor: “A bail out of SVB makes sense.” @immad : Although we compete with SVB, I have always had a lot of respect for them. They gave my previous company a loan that helped us survive and took me to my first and last Gaga concert. It's sad to see them go through this difficult time and hope they make it to the other side. Brad Hargreaves / @bhargreaves : One, SVB was incredibly integrated into the lives of many founders. Not just their startup's bank & lender, but also provided personal mortgages and other financial services. A whole mess for FDIC (or the eventual buyer) to unwind. James Titcomb / @jamestitcomb : A few people have said today that Silicon Valley Bank UK has majority of customers on 30-day notice to withdraw funds, and has refused to waive that. SVB UK is separately capitalised to US but several VCs still encouraging startups to withdraw. Ellen Huet / @ellenhuet : I keep seeing heartfelt stories like this about SVB. It seems like mortgages for founders went a long way in building goodwill (and business) What else made SVB such an emotional pillar of SV? Parties/conferences seem helpful but not as resonant https://twitter.com/... Stephanie Ruhle / @sruhle : THIS MATTERS. The 19th largest bank blew up in 36 hours. Matt / @regulatorynerd : 1/ If you're a VC or a tech founder with exposure to SVB, it's good to start talking through contingencies. But it's also not worth panicking until Monday. @cloud_opinion : Why hasn't SVB try to pivot to brand themselves as a generative AI based fintech company to raise capital? Eric Newcomer / @ericnewcomer : Lots of discussion right now about whether to blame the VCs who warned that this was a problem or celebrate them... I'm in the celebrate them camp* https://twitter.com/... Fred Vogelstein / @fvogelstein : Doesn't the impact of SVB failure turn on $$ value of deposits over the $250k limit? Those under that limit are covered and reimbursed almost instantaneously. Does any one have estimate of that number? John Paul Koning / @jp_koning : Silicon Valley Bank is a very American mess. The Basel rules that protect against these sorts of banking flameouts were not applied in the the US, or at least, they were only applied to very large banks. Silicon Valley Bank was exempt: https://www.ft.com/... https://twitter.com/... Taylor Lorenz / @taylorlorenz : Absolutely wild https://twitter.com/... @mikeisaac : “Every man for himself” mindset out here till the end https://twitter.com/... Jim Rickards / @jamesgrickards : If you had more than $250,000 in Silicon Valley Bank, you can't get your money. But you can call 1.866.799.0959. A trained FDIC help center therapist will be glad to speak with you. Good Luck. https://www.fdic.gov/... John Paczkowski / @johnpaczkowski : “SVB completely fucked this up.” via @alexrkonrad https://www.forbes.com/... Mike Butcher / @mikebutcher : These guys called it in Jan. https://twitter.com/... Jim Greco / @jgreco : The Fed must feel pretty confident about their post-GFC framework for managing systemic bank risk. 18th largest bank and not a word about providing emergency liquidity to support it. @cfarivar : Silicon Valley Bank's Abrupt Closure Leaves Venture Capitalists And Founders Scrambling (by @alexrkonrad) https://www.forbes.com/... Nick / @nickatfp : Before SVB, could ape holders use multiple slurp juices on a single ape? I think not 🙏 Justin Wolfers / @justinwolfers : So far there's little evidence of contagion. @WSJ reporting that credit default swaps on the big banks “have barely budged.” There's plenty of headline-worthy charts of certain stocks dipping (eg regional banks), but not much going on where the money is. https://www.wsj.com/... https://twitter.com/... @onebandwagonfan : Welp, our @Rippling payroll wasn't run today, and it's apparently due to what's going on with SVB... Justin Wolfers / @justinwolfers : SVB might have been especially vulnerable because its customers were a tight-knit community. Often if you have worries, I might not hear about them. But if you have worries, and you share them with your VC, they then tell me to withdraw, and it cascades. https://twitter.com/... Andrew Yang / @andrewyang : Silicon Valley Bank repercussions will span far and wide. https://twitter.com/... Robert Scoble / @scobleizer : ChatGPT has advice for startups with money in Silicon Valley Bank. https://twitter.com/... Sar Haribhakti / @sarthakgh : “As at the end of 2022, it had 37,466 deposit customers, each holding in excess of $250,000 per account...In aggregate those customers with balances greater than this account for $157 billion of Silicon Valley Bank's deposit base, holding an average of $4.2 million on account... https://twitter.com/... @applehelix : Good luck to FDIC trying to figure out what to do with its biotech venture debt portfolio. These typically have 2 year duration which means 50% of loan portfolio matures each year. https://twitter.com/... Jordan Schachtel / @jordanschachtel : Today is a good reminder that FDIC insurance doesn't really matter. It acts as a stopgap for the government and a psychological mechanism to prevent a bank run. Of course, if the whole system were to melt down, nobody is getting their $250k back! Brendan Pedersen / @brendanpedersen : Bloomberg's @ElleBeyoud and @kjspeakstruth reported an hour ago that FDIC and Fed officials visited the bank yesterday. That was a good, good indicator that shit was about to break bad. https://twitter.com/... James McLeod / @jamespmcleod : This is the crazy thing with the SVB situation. 93% of the deposits are over the $250k FDIC insurance threshold. Makes sense since it was a bank for tech companies that would potentially have millions of dollars to fund their growth. But it makes the situation ... very messy. https://twitter.com/... @acityinohio : does this FDIC have a coin I can buy or Steven Kelly / @stevenkelly49 : Probably notable that the FDIC couldn't wait until the close of business today to shut it down Will Slaughter / @bamabonds : Last Friday, nobody expected the 16th largest depository institution in the US to be seized by the FDIC this Friday. 2nd largest bank failure in U.S. history, essentially out of the clear blue sky. Of course this is a big deal. Parker Conrad / @parkerconrad : Our top priority is to get our customers' employees paid as soon as we possibly can, and we're working diligently toward that on all available channels, and trying to learn what the FDIC takeover means for today's payments. Dan Primack / @danprimack : As a side note... SVB has been a massive sponsor of tech events, tech and finance media, etc... Looks like that might be gone. Bruce Booth / @lifescivc : Sadly, this tweet didn't age well... Looks like a fear-driven “run on the bank” has destroyed a once great financial institution.... FDIC Receivership wasn't fathomable only a few days ago.... Took 40 years to build a great brand, 48 hrs to wipe it out. https://twitter.com/... Randy Woodward / @thebondfreak : I'd love to be a fly on the wall for the FDIC's call to Jamie Dimon. Gunjan Banerji / @gunjanjs : As of the end of 2022, Silicon Valley Bank estimated that **uninsured** deposits exceeded those insured by FDIC by around $151 billion, according to its annual report h/t @telisdemos https://www.wsj.com/... @52kskew : This seems fitting to the state of some banks currently $SI $SVB https://twitter.com/... Don Johnson / @donmiami3 : The last bank the FDIC had to takeover with a bridge bank was IndyMac in 08 - with about $35bil in assets, SVB has over 200 BILLION and 150bn is uninsured by taxpayers. People aren't paying attention. Claire Williams / @byclairew : “That's amazing,” said John Popeo, a bank resolution lawyer for the FDIC during the financial crisis. “Banks are not supposed to fail until their scheduled closing time. So this speaks to the urgency of the situation.” https://www.americanbanker.com/ ... @wideofthepost : with an fdic insured bank: orderly process, people will have access to their accounts in this case by the next business day, the first $250k is protected with crypto: you would've lost everything to bankruptcy if your money hadn't already been siphoned out by some ponzi fraud https://twitter.com/... Hunter Horsley / @hhorsley : As everyone remembers from the GFC, the financial world is very intertwined. Every development has knock-on effects, sometimes hard to anticipate. Here's an example https://twitter.com/... @thresh : @spacanpanman It's super sad. SVB has been a key supporter of the tech ecosystem forever. To see people turn their backs on them in a time of need is disappointing. Fiduciary responsibility is one thing but a vocal show of support from influential firms would have made a huge impact Sean Tuffy / @smtuffy : Given its profile and client base, it would not shock me if further shenanigans were unearthed at the bank formerly known as SVB. Buck / @bucknsf : The majority of SVB deposits are uninsured and are VC and startup funds. The chilling effect on the SV ecosystem is going to be insane unless there is a clear path to being made whole from asset sales. Thinking through the ripple effects here. @litcapital : VCs yesterday: “move all your money out of SVB and into First Republic!!!” First Republic today: https://twitter.com/... Brian Roemmele / @brianroemmele : It is done [1]. The amazing era of Silicon Valley Bank has ended. They were a pioneer bank of the early Silicon Valley. They were independent, innovative and some of the best in banking at one time. My heart goes out to the many friends I have had https://www.fdic.gov/...... https://twitter.com/... https://twitter.com/... JC Oviedo / @jcoviedo6 : $SIVB from $285/share to bankrupt in a week. @parikpatelcfa : Forbes strikes again https://twitter.com/... @jasondebolt : I suspect that Silicon Valley Bank is not the only bank that went balls deep on long term treasury bills. If I'm right, the fed is going to tip over a lot of regional banks if they continue to raise rates. Scary situation unfolding here. $SIVB Porter Collins / @seawolfcap : The $SIVB failure is just another epic failure of the FED. They had 15 post Lehman to fix the banking system. I also find it ironic they they failed due to US government debt not dogshit VC loans. @thetranscript_ : Fun fact: $SIVB was started in 1983 over a game of poker https://twitter.com/... @pinboard : In seriousness though, hats off to Silicon Valley Bank for doing this on hard mode and destroying regulated dollar deposits when everyone else has been taking the easy route of blowing up crypto. Such an old school work ethic can't fail but impress their future employer (Wendy's) Ed Zitron / @edzitron : To be fair for years I've always found SVB to be slow doing wires lol https://twitter.com/... Shai Goldman / @shaig : the scale of this fallout is massive, people don't realize it Ethan Perlstein / @eperlste : Congratulations VCs: your bank run worked https://twitter.com/... @jason : 🚨 Lots of startups are missing payroll in 2-4 weeks if: 🚨 a) Silicon Valley Bank doesn't have the deposits b) SVB doesn't get sold or c) SVB isn't rescued ☢️ This is DEFCON 1 ☢️ Dave Troy / @davetroy : Lotta libertarian whack jobs praying for the rapture today on the SVB uncertainty. Maybe, they think, the world works the way Uncle Mises and Auntie Ayn promised it should. And maybe, if it doesn't behave, cousin Peter can set it on fire. 🤞 🙄 https://twitter.com/... Adam Cochran / @adamscochran : Worth noting, that this was nothing but a concentrated bank run, spurred in a specific sector by influential actors (who stood to benefit) But, banks are all in the same boat in terms of HTM structure, only difference is breadth of client base. Adam Cochran / @adamscochran : Holy crap. Bloomberg reporting SVB closed by regulator - deposits will be moved to protected accounts by regulators. @jonwu_ : Unfortunately, more than 93% of SVB's $161 billion in deposits are uninsured. Meaning a huge swath of America's startup ecosystem has their money locked in a giant paper IOU with the Federal government. https://twitter.com/... Brad Hargreaves / @bhargreaves : And given the weak fundraising environment, a number of startups have been reliant on venture lenders - e.g., SVB - not aggressively pursuing amortization of debt or triggering default for covenant foot faults (e.g., cash balances). How will the FDIC handle this? Mass defaults? @grdecter : 2. 55.4% of their assets are securities. The highest of their entire peer group. https://twitter.com/... @luke_metro : did we just meme a bank run into existence Robert Evans / @iwriteok : so here's what's happened: there's a bank in Silicon Valley that funds all the gambling tech weirdos did in the low interest rate years that bank made some bad bets that the good times would continue now about $160 billion in the richest people's deposits are unsecured https://twitter.com/... @flying_mom : The whole Silicon Valley depended upon one institution, SVB, and now it is dead Laurence / @functi0nzer0 : Dear God, I don't ask you for much, but I would really appreciate it if you revealed that the seed money raised for the 3AC/Coinflex exchange was being held by SVB https://twitter.com/... Randy Woodward / @thebondfreak : Powell forces yields to all-time lows and keeps them there for 2yrs. 80% of bank assets reprice at those lows. Powell hikes at the fastest pace ever. Bank assets double in duration, stuck at those low yields. Banks forced to raise funding rates. SVB tip of the iceberg. https://twitter.com/... Kia Richards / @kiarichards_ : I feel for everyone at SVB, but they have insolvency issues. Liquidity risk is nothing to gamble with, and most companies don't have the privilege of waiting and seeing what happens. Lehman had a liquidity problem, and the board kept everyone in the dark. @zosegal : Many startups you know and love bank(ed) with SVB. Many will struggle to make payroll and pay vendors. Fractional reserve banking once again the culprit. https://twitter.com/... Adam Cochran / @adamscochran : Ironically for a startup with money stuck in a bank, the easiest place to get a loan (especially with a bluechip VC investor) was SVB, as they took venture debt as collateral for short stuff. Wonder who picks up that up? Probably just high cost private lenders sadly. Chris Camillo / @chriscamillo : Starting to get portfolio company emails on SVB impact. “We are banked with SVB and we are fckd” Packy McCormick / @packym : Brutal day. Whether you still have money with SVB or not, overcommunicate with your investors. If you bank elsewhere, let them know. If you still have money at SVB, let them know. Hard conversation to have but it's the best chance at figuring out a path forward and you're not... https://twitter.com/... James Clayton / @jamesclayton5 : Turns out “wild” was an understatement. Just spoke to someone literally driving down to Silicon Valley Bank to try and get their funds out. https://twitter.com/... Jen Wieczner / @jenwieczner : imagine a PR fail that causes the collapse of your company https://twitter.com/... Brad Hargreaves / @bhargreaves : CEOs yesterday faced a hard choice: Pull your deposits and go into default on your venture debt or risk losing everything if the bank failed. Many chose to hold tight as SVB's outright failure seemed outlandish. Daniel / @growing_daniel : The arranged collapse SVB is GPT-4s opening salvo in the new phase of the AI war Jameson Lopp / @lopp : I'd like to thank @SVB_Financial for closing @CasaHODL's bank account last year because we refused to force AML/KYC upon our clients. 😘 Shai Goldman / @shaig : unfortunately there is going to be a lot of collateral damage that is going happen given the news. startups, VCs (firms and gps), PEs firms, service providers are all intertwined with SVB Eli Dourado / @elidourado : At a normal bank, 40% of deposits are uninsured (over the $250k/customer limit). At SVB, 90% of deposits were uninsured. So SVB was uniquely run-prone on account of its customer base and FDIC limits. Derek Thompson / @dkthomp : Silicon Valley Bank thread. This is a dire overview of the implications. Many tech CEOs rely on SVB for payroll—and often for their own individual wealth management. https://twitter.com/... Brian Sullivan / @sullycnbc : The run on west coast banks is scary ... but what's probably a lot more scary is how thousands of SVB employees feel right now who are probably going to lose their jobs. 48 hours ago it was just another day at the office. Now, there may be no office. People matter. @0xc0le : The past 8 months at SVB have been amazing. I truly believe our crypto compliance team was building a program that fully supported the crypto industry and rewarded decentralization. @arlanwashere : If you know anyone who works at SVB, text them your support. It's at times like these for banking institutions that people can be upset and not see hope. You need to let them know there is hope. @fdicgov : 1/2 The FDIC has been appointed receiver. Customers will have full access to their insured deposits no later than Monday morning, March 13. Rohit Chopra / @chopracfpb : The California Department of Financial Protection & Innovation has closed Silicon Valley Bank and appointed the @FDICgov as receiver. https://twitter.com/... Tamer / @oxdeadbeef_ : @balajis That amount is ~$150B. Ouch how many startups and corporations are rekt? https://twitter.com/... Nick Dobos / @nickadobos : @wongmjane Real bad, FDIC only covers 7% of their deposits. Could really mess up funding, especially for startups and VCs in the near future, chance of larger financial cascade https://twitter.com/... Lizelle van Vuuren / @heylizelle : Jesus, this is tough. SVB was instrumental to so many startups. But today it has put so many founders in a paralyzing position. I hope this gives a pause, a moment to take a breath and get sold this weekend? Michael Arrington / @arrington : Not sure how they'll blame this one on crypto https://www.zerohedge.com/... Adam Cochran / @adamscochran : Good clarity on the SIVB process. FDIC pays out up to $250k - anything else you get a certificate of the amount, and hope enough gets paid out to cover it in the liquidation/sale process. A lot of books just became paper money. https://twitter.com/... Parker / @pt : Isn't the government being able to print infinite amounts of money the exact thing guys with crypto hashtags in their profile think is the problem? https://twitter.com/... https://twitter.com/... @modestproposal1 : i assume there will immediately be a market for the uninsured certificates, but let's say those trade at .50-60 (just making it up, but seems reasonable if recovery .85-100 but over years) runways just got cut in half. Robert Scoble / @scobleizer : I've been through a bunch of downturns and things but this one is the darkest day for Silicon Valley that I can remember. At least since March 2000 when the dot com world collapsed. The effects will be felt for years. https://twitter.com/... Mark Suster / @msuster : 1/ What next at SVB? Nobody knows but here's what I suspect: - Reports that they can't raise equity, looking for a buyer of the business - Trading halted on their shares - We suspect they will find a buyer that will emerge today or over the weekend What if not? Mark Suster / @msuster : 6/ The super annoying thing? - Investors who recommended pulling everything will feel righteous this AM - The loudest voices were yelling fire in a crowded movie theater & congratulate themselves on rushing everybody out @kashhill : The only thing I know about Silicon Valley Bank is that back in 2013 when I was writing a lot about Bitcoin, and there was so much regulatory uncertainty around it, SVB was the only bank that would offer accounts to cryptocurrency start-ups. Cristina Cordova / @cjc : I feel terrible for all the great folks at @SVB_Financial I've worked with throughout the years. In building companies, many of us have had similar moments (security incidents, outages, etc.) and that's never how you want to see a company go out.

CNBC 2023-03-11