The US federal institution Federal Deposit Insurance Corporation (FDIC) authorized the sale of Silicon Valley Bank (SVB), in serious difficulties, to First Citizens Bank & Trust, based in North Carolina.
The transaction involves the sale of all of SVB’s deposits, the FDIC said in a statement Monday.
First Citizens Bank takes over, he explains, “all loans and other assets, takes over all customer deposits and other risk assets of Silicon Valley Bridge Bank,” the entity created by the FDIC to succeed the SVB .
The transaction “is structured as a loss-sharing purchase of an entire bank” and the former SVB’s 17 branches reopen today under the name “Silicon Valley Bank, a division of First Citizens Bank.”
The operation includes 119,000 million dollars (110,500 million euros) in deposits and 72,000 million dollars (66,800 million euros).
The FDIC is a regulatory agency of the US Federal Government that provides deposit insurance to commercial banks.
This federal institution was created in 1933, during the Great Depression, to restore confidence in the American banking system.
Stocks react upward
The main European stock markets were trading higher this morning and, at 9:00 am, in Lisbon, the EuroStoxx 600 advanced 0.77% to 443.52 points.
The London, Paris and Frankfurt stock markets rose 0.57%, 0.52% and 0.76%, as well as those of Madrid and Milan, which rose 0.90% and 0.82%, respectively.
After opening up, the Lisbon Stock Exchange maintained its trend and at 09:00 am the main index, the PSI, rose 0.25% to 5,748.25 points.
The macroeconomic agenda for the day includes the release of the Ifo business climate index in Germany, UK retail sales and the US Federal Reserve’s (Fed) Dallas index for manufacturing.
On the exchange front, the euro opened higher in the Frankfurt exchange market, to quote at 1.0762 dollars, compared to 1.0760 dollars on Friday and 1.0909 dollars on February 2, the maximum since April 2022.
The euro has been trading above parity against the dollar since November 7, after having been below parity since September 20, with the exception of October 26 ($1.0076).
The barrel of Brent oil for delivery in May opened higher on the Intercontinental Exchange Futures (ICE) in London, to trade at 75.81 dollars, compared to 74.99 on Friday and 72.97 dollars on March 17, minimum since January 2022.
The Silicon Valley Bank collapse rocked the US financial system, prompting the FDIC and other regulators to act to protect depositors and prevent financial disruption.
The situation at the bank, based in Santa Clara, California, began to experience serious problems on March 10, when depositors began withdrawing money, mainly savings but also investments.
It is the second largest banking collapse in US history.
The bank’s failure raised concerns about the health of the banking sector in the United States and Europe.
Source: TSF
