Silicon Valley Bank resumed its operations on Monday after it was shuttered down last week. New CEO Tim Mayopoulos in a bid to regain the client’s trust wrote a letter mentioning that the bank was conducting business as usual.
The letter read- “Silicon Valley Bank NA is open and conducting business as usual. We are here to serve you. I recognize that the past few days have been an extremely challenging time for our clients and our employees, and we are grateful for the support of the amazing community we serve. I have joined the company starting today,”
Following the collapse, the FDIC created the new entity, Silicon Valley Bank N.A.- an FDIC-operated bridge bank and said that the existing and new deposits of the collapsed bank will be protected by the US financial regulator.
On Friday last week, the regulators took control of SVB after a huge run on deposits left the medium-sized bank unable to stay afloat on its own.
On Sunday, US authorities unveiled sweeping measures to rescue depositors’ money at the failed SVB.
A bridge bank is a chartered national bank that operated under a board appointed by the FDIC. It assumes deposits and certain other liabilities and purchases certain assets of the failed bank. The structure is designed to ‘bridge’ the gap between the failure of the bank and the time the FIC can stabilize the institution and implement an orderly resolution.
SVB has been a key lender to start-ups across the USA since the 1980s. The age-old institution collapsed after depositors started withdrawing money ar an alarming rate as they feared the bank would soon become bankrupt.