According to the latest report, on March 3, the US Federal Deposit Insurance Corporation (FDIC) issued a statement saying that it and the Raleigh, North CarolinaFirst Citizens Bank(First–Citizens Bank & Trust Company) entered into an assignment and assumption agreement for all deposits and loans at the Bridge Bank of Silicon Valley.
That means First Citizens Bank will take all deposits and loans from Silicon Valley Bank (SVB).buy it.
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After Bridge Bank, officially transferred to the bank
The key points of the FDIC statement are as follows:
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Seventeen former branches of the Bridge Bank of Silicon Valley will open as First Citizens Bank on March 17 local time.The customer service of Silicon Valley Bridge Silver will not be affected.
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Customers will be notified by First Citizens Bank to switch systems to the new bank.Depositors will automatically become depositors with First Citizens Bank.
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All deposits assumed by First Citizens Bank will continue to be FDIC insured up to the insurance limit. ,
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The total assets under management exceeds 1000 billion+
As of March 3, the total assets of Silicon Valley Bridge Bank were about $10 billion,Deposits totaled about $1190 billion.
The deal includes the purchase of approximately $165 billion in assets of the Silicon Valley bridge bank at a discounted price of $720 billion.about$ 900 billionsecurities and other assets will beremain in receivership, at the disposal of the FDIC.
In addition, the FDIC received equity appreciation rights in the common stock of First Citizens Bank AG, with a potential value of $5 million.
The FDIC estimated that the failure of Silicon Valley Bank would cost its Deposit Insurance Fund (DIF) approximately $200 billion.The exact cost will be determined when the FDIC terminates receivership.
In this incident, the large-scale "borrowing short to buy long" was an important factor that eventually led to the insolvency of Silicon Valley Bank. As a result, the bank's investment strategy and risk control awareness were questioned, and the then CEO and CFO were even questioned. Push to the cusp.
According to an investigation by the Financial Times, the bonuses of the two executives are directly linked to the bank's return on equity, or profitability.
After 2017, especially in 2021, when a lot of money is pouring in, Silicon Valley Bank has increased its returns by buying long-term bonds.Correspondingly, the bonuses of the two men have more than doubled and more than tripled in four years.Some experts believe that linking bonuses to this profitability metric is an "incentive to risk".
The thunderstorm at Silicon Valley Bank was the biggest banking crisis in the United States since 2008.Doubts about risk aversion.
Maybe the Fed and the Treasury need a more robust and insurance approach to regulation.
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This article is reproduced from the investment bank PEVC
Picture | Part of the picture comes from Reuters,Copyright belongs to the original author
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