By RIA ROEBUCK JOSEPH
THE CENTER SQUARE CONTRIBUTOR
(The Center Square) — California Gov. Gavin Newsom lauded the Biden administration for its handling of the failure of Silicon Valley Bank as regulators work to ensure the bank’s deposits.
The Federal Deposit Insurance Corp. took control of the bank on Friday. Gov. Newsom said he had been working behind the scenes for the past two days to stabilize the situation.
Bank officials announced Wednesday they were attempting to raise $2 billion. The announcement led to the withdrawal of funds by venture capital firms, which led to the bank’s failure.
The FDIC reopened the bank on Monday as the Deposit Insurance National Bank of Santa Clara. SVB had 17 branches in California and Massachusetts, according to the FDIC.
“The Biden administration has acted swiftly and decisively to protect the American economy and strengthen public confidence in our banking system,” Gov. Newsom said in a statement. “Their actions this weekend have calmed nerves and had profoundly positive impacts on California.”
President Biden said Monday that the bank’s failure would not affect taxpayers.
“No losses will be, and I want, this is an important point, no losses will be borne by the taxpayers,” President Biden said. “Let me repeat that: No losses will be borne by the taxpayers. Instead, the money will come from the fees that banks pay into the Deposit Insurance Fund.”
SVB had $209 billion in total assets and about $175.4 billion in total deposits on Dec. 31, 2022, according to a news release from the FDIC.
The FDIC said the amount of SVB deposits over the $250,000 insurance limit is unknown.
New York City’s Signature Bank was also closed by the FDIC on Sunday, according to its website. The FDIC was named receiver and has transferred the bank’s holdings to Signature Bridge Bank, N.A.
The last bank to fail was Kansas-based Almena State Bank in October 2020.