The banking crisis that hit the United States has spread, affecting a large number of financial institutions. After the Silvergate case, Silicon Valley Bank was added to this unfortunate list, leaving the management of its shares to the Federal Deposit Insurance Corporation. However, a recent announcement from the government agency indicates that SVB’s shares have been sold to First Citizens Bank. It is the new owner of this banking institution.
FDIC Announces Sale of SVB Stock to First Citizens Bank
After unsuccessful attempts to sell the Silicon Valley Bank in conjunction with SVB Private last week, the Federal Deposit Insurance Corporation (FDIC) decided to divest them separately. The First Citizens Bank thus volunteered to acquire what was left of the Silicon Valley Bank.
Indeed, as of this Monday, March 27, the FDIC announced that the First Citizens Bank was the new owner of the troubled bank. This announcement confirms information leaked by international media. The latter stated that the First Citizens Bank was in advanced negotiations with the FDIC for this acquisition.
Thus, all deposits and liabilities of the Silicon Valley Bank will now revert to the acquiring bank.
First Citizen has released a substantial sum for the buyout
The press release of the FDIC released last Sunday stated that the acquisition of Silicon Valley Bank’s shares would require the purchase of about $72 billion in assets with a discount of $16.5 billion. A real golden deal for the First Citizens !
Fortunately, the latter has enough assets to cover all expenses. With total deposits of $89.4 billion and approximately $109 billion in assets, First Citizens is up to the challenge.
It should be noted that the agreement includes the 17 former subsidiaries of the pro-crypto bank, Silicon Valley Bank. All these companies will now be able to operate under the aegis of the First Citizens Bank.
After the sinking of Silvergate Bank, which caused considerable damage, the Silicon Valley Bank was also forced to close its doors under pressure from California regulators. However, a few days later, Elon Musk declared himself open to the idea of buying out Silicon Valley Bank and turning it into a digital bank. Of course, it was unthinkable that the US authorities would agree to be helped by an ardent supporter of crypto. This agreement may save the honor of the U.S. authorities, but one thing is certain: crypto will continue to hold sway over fiat currencies.
Coming from a journalism university background, I came across Bitcoin and cryptocurrencies not long ago.
The potential of the Blockchain seduced me and I made it my research topic.