The U.S. Federal Deposit Insurance Corporation (FDIC) opened a sale process for Silicon Valley Bank (SVB) late Saturday night, as indicated by reports. Closing bids are expected to be received by Sunday afternoon. Anonymous sources indicated that the FDIC is hoping to finish the deal quickly after California government bodies shut down the bank, and put it into FDIC receivership on Friday.
Sources Say FDIC Is Rushing to Sell Off SVB Assets Ahead of Sunday Afternoon’s Final Bids
The failure of Silicon Valley Bank (SVB) has caused a major stir in the United States, and many think that it has revealed a weak spot in the American banking system. However, U.S. Treasury Secretary Janet Yellen has maintained that the system is “resilient” and “safe and well-capitalized.” As indicated by a Bloomberg report, the auction for SVB began on Saturday night, with final bids due by Sunday.
Unnamed sources cited by Bloomberg said that the FDIC is working expeditiously to sell off SVB assets before branches resume business on Monday. The report states that bids are due by Sunday afternoon, with a final call potentially not being declared until Sunday night. Bloomberg contributor Matthew Monks tried to reach the FDIC for comment but was unable to locate anyone outside of their normal business hours.
The collapse of SVB has prompted a major debate over whether the bank will receive a government bailout. However, based on Yellen’s comments, it appears that a bailout is not being considered. Many tech founders and venture capitalists, including Galaxy Digital’s Mike Novogratz, Y Combinator’s Garry Tan, and Craft Ventures’ David Sacks, have called for a federal bailout.
Billionaire Bill Ackman, the CEO of Pershing Square Capital Management, has stressed the need for a bailout, warning of “more bank runs” by Monday if no action is taken. In response to the situation, hundreds of venture capitalists and funds in the U.S. and the U.K. have released a statement expressing their expectation that the bank will be “adequately capitalized.”
What do you think the future holds for Silicon Valley Bank and the wider U.S. banking industry in light of the ongoing debate over bailouts and the potential weaknesses in the system? Express your thoughts about this subject in the comments section below.
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