In the wake of the second largest bank failure in U.S. history, the failure in question, Silicon Valley Bank, has some comforting words amongst the turmoil. Clients of the bank received an email last night from SVB’s new CEO Tim Mayopoulos stating that everything is fine.
According to the letter, a copy of which was posted to Twitter and obtained by Gizmodo, Mayopoulos joined the bank as CEO yesterday. Over the weekend, the FDIC transferred deposits and assets to Silicon Valley Bank, N.A., which is a comission-operated bridge bank, according to an FDIC press release. Mayopoulos announced to clients via the email that new and existing deposits are protected by the FDIC in Silicon Valley Bank, N.A. but that unprocessed wire transfers placed on March 9 or 10 will need to be placed again.
“Silicon Valley Bank, N.A. is open and conducting business as usual. We are here to serve you. I recognise 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,” Mayopoulos wrote in the letter. “Depositors have full access to their money and new and existing deposits are protected.”
Mayopoulos is calling on his experience at mortgage financing firm Fannie Mae, which he joined in the wake of the 2008 recession, to help guide the bank back to solid ground. According to his LinkedIn, he served as Fannie Mae CEO from 2012 to 2018 and was also president of a Silicon Valley startup called Blend, that provided software financial institutions.
Silicon Valley Bank was shut down on March 10 after clients began withdrawing funds to ride out the current economic uncertainty. Silicon Valley Bank then chose to sell their investments at a loss, which spooked clients into withdrawing more money, leading Silicon Valley Bank to become the first FDIC-insured bank to fail in 2023. While the government did step in to help, it did not use taxpayer dollars, and did not rescue shareholders, certain debt holders, and senior management, according to Treasury Secretary Janet Yellen.