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The U.S. Federal Deposit Insurance Corporation (FDIC) began an auction process for Silicon Valley Bank (SVB) late Saturday night, according to reports. Final bids are due by Sunday afternoon. Unnamed sources indicate that the FDIC is seeking to close the deal promptly after California regulators closed the bank and placed it into FDIC receivership on Friday.
Sources Say FDIC Is Working Swiftly to Sell Off SVB Assets as Final Bids Due by Sunday Afternoon
The collapse of Silicon Valley Bank (SVB) has caused a significant stir in the United States, as many believe it has revealed a weakness in the U.S. banking system. However, U.S. Treasury secretary Janet Yellen has maintained that the system is “resilient” and “safe and well-capitalized.” According to a recent Bloomberg report, an auction for SVB began on Saturday evening, and final bids will be selected on Sunday.
Anonymous sources cited by Bloomberg say the FDIC is working swiftly to sell off SVB assets before branches open on Monday. The report states that final bids are due by Sunday afternoon, with a final decision potentially not being announced until Sunday evening. Bloomberg contributor Matthew Monks attempted to contact the FDIC for comment but was unable to reach anyone outside of their normal business hours.
The failure of SVB has sparked a significant debate over whether the bank will receive a bailout. However, based on Yellen’s statements, it appears that a bailout is not being considered. Many tech founders and venture capitalists, including Galaxy Digital’s Mike Novogratz, Y Combinator’s Garry Tan, and Craft Ventures’ David Sacks, are calling for a federal bailout.
Billionaire Bill Ackman, the CEO of Pershing Square Capital Management, has emphasized the need for a bailout, warning of “more bank runs” by Monday if action is not taken. In response to the situation, hundreds of venture capitalists and funds in the U.S. and the U.K. have issued a statement expressing their hope that the bank will be “appropriately capitalized.”
What do you think the future holds for Silicon Valley Bank and the wider U.S. banking industry in light of the ongoing debate over bailouts and the potential weaknesses in the system? Share your thoughts about this subject in the comments section below.
Image Credits: Shutterstock, Pixabay, Wiki Commons, rafapress / Shutterstock.com
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