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The US extends the auction for the remains of Silicon Valley Bank until Friday

2023-03-21T04:51:03.527Z


The deposit guarantee fund has so far been unable to find a buyer The United States has yet to find a buyer for Silicon Valley Bank's deposits and assets. The FDIC, the federal deposit guarantee fund that intervened in the bank, announced Monday that it will accept offers until Friday afternoon, with an eye on finding a solution next weekend. This Sunday, the authorities announced that they had reached an agreement whereby Flagstar Bank, a subsidiary of New Yor


The United States has yet to find a buyer for Silicon Valley Bank's deposits and assets.

The FDIC, the federal deposit guarantee fund that intervened in the bank, announced Monday that it will accept offers until Friday afternoon, with an eye on finding a solution next weekend.

This Sunday, the authorities announced that they had reached an agreement whereby Flagstar Bank, a subsidiary of New York Community Bancorp, purchased and assumed practically all the deposits and certain loan portfolios from Signature Bank, the other bankrupt bank in this crisis.

The shares of NY Community Bancorp have skyrocketed this Monday on the stock market more than 30% after the operation.

They recover the ground lost in the last two weeks.

Over the weekend, however, there was no progress on Silicon Valley Bank.

"The FDIC and bidders need more time to explore all options in order to maximize value and achieve optimal results," the agency said in a statement Monday.

To help simplify the bidding process and broaden the pool of potential bidders, the Federal Deposit Insurance Corporation (FDIC) is allowing separate bids by the bank and its private banking affiliate.

Banks (alone or in alliance with non-banking partners) may submit offers for the entire bank or for the deposits or assets of the entities, while the rest of the firms may bid for the asset portfolios.

The deadline for submitting offers for the private banking subsidiary will end on Wednesday, while those submitted by the bank as a whole will have until 8:00 p.m. on the East Coast of the United States on Friday, March 24, 2023.

Meanwhile, depositors will continue to have access to all their money through Silicon Valley Bridge Bank, the bank's successor bridge entity, which operates 17 branches in California and Massachusetts, and through digital banking, cards, ATMs and the check issuance.

The goal of creating Silicon Valley Bridge Bank was to give the FDIC time to stabilize the bank and sell off its assets.

The deposit guarantee fund tries to minimize the cost of the crisis, for which the price that buyers pay for the assets will be vital.

In the case of Signature Bank, it has given a first estimate of the cost of the institution's intervention, which is provisionally estimated at 2,500 million.

The exact cost will be determined when the judicial administration of the intervened entity is terminated.

The FDIC has made it clear that this cost will be borne by the fund with contributions from private entities.

The president of the United States, Joe Biden, twice assured that taxpayers will not have to assume those losses.

Treasury Secretary Janet Yellen has also insisted on that message.

No further agreement relating to First Republic Bank has yet to be announced.

The entity received an injection of 30,000 million dollars in deposits from the big Wall Street banks, but even that has not managed to stop its stock market collapse.

At the open of the Stock Market this Monday, First Republic shares continue to plummet and have set new lows.

The bank's market capitalization has fallen to just $3.6 billion.

At the beginning of the year it was worth about 30,000 million.

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Source: elparis

All business articles on 2023-03-21

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