• The US Federal Deposit Insurance Corporation (FDIC) facilitated a purchase and assumption agreement between SVB and First Citizens Bank.
• This deal will enable the assets, loans, and deposits of SVB to be taken over by First Citizens Bank.
• The takeover deal includes purchasing about $72 billion worth of SVB’s assets at a discount of $16.5 billion while $90 billion in securities remains in the FDIC receivership.
SVB Takeover Agreement Facilitated by FDIC
The US Federal Deposit Insurance Corporation (FDIC) has facilitated a purchase and assumption agreement between Silicon Valley Bank (SVB) and First Citizens Bank & Trust Company, a Raleigh, North Carolina-based lender. With this agreement, the assets, loans, and deposits of SVB will be taken over by First Citizens Bank.
Details of the Agreement
The takeover deal includes purchasing about $72 billion worth of SVB’s assets at a discount of $16.5 billion while $90 billion in securities remains in the FDIC receivership. As reported by crypto.news, US regulators put SVB into receivership earlier this month as it was experiencing a severe liquidity crisis.
Impact on Depositors
Depositors of SVB will automatically become customers of First Citizens after completion of the purchase and assumption deal; all deposits assumed by the latter will continue to be insured by the FDIC. Furthermore, operations at 17 branches across the US will resume as First Citizens Bank on March 27th for current branch customers who are now becoming customers of First Citizens bank following closure due to banking crisis experienced earlier this month prior to completion or agreement with FDIC facilitating purchase and assumption from 1st citizens bank & trust company from Raleigh NC USA .
Crypto Industry Resurgence
Experts have argued that despite banking turmoil causing denial access to banking services for web3 projects in US ,crypto industry is expected to wax stronger eventually replacing traditional banks in remittance service near future .This banking turmoil triggered resurgence in prices for bitcoin and other cryptocurrencies resulting global crypto market cap increase reaching at 1 point 16 trillion according CoinMarketCap data .
In conclusion ,the purchase&assumption transaction between Silicon Valley Bank &First Citizen’s Bank is an important step forward towards providing much needed financial stability &seamless customer experience during these unprecedented times caused due to Covid 19 pandemic leading up many financial institutions facing liquidity crisis with potential risk looming large particularly affecting web 3 projects seeking bank account opening denials due to regulatory hurdles imposed by authorities .