Resource Center: Silicon Valley Bank Failure and the State of the US Banking System

Late last week, regulators shut down Silicon Valley Bank due to a combination of factors including increased customer withdrawals and interest rate risk management issues. The California Department of Financial Protection and Innovation revoked the bank’s state charter and transferred the bank into receivership under Federal Depository Insurance Corporation (FDIC) supervision. The mid-size bank provided banking services to over 2,500 venture capital firms as well as funding to tech start-ups, and carried over $209 billion in assets. A joint statement from Secretary of the Treasury Janet Yellen, Federal Reserve Chairman Jay Powell, and FDIC Chairman Martin Gruenberg stated that all depositors of Silicon Valley Bank would be fully protected, and depositors would have access to all of their money starting Monday, March 13. As regulators continue to assess the fallout from Silicon Valley Bank, other mid-sized financial institutions have also experienced instability including Signature Bank which had its New York charter revoked and is under receivership by the FDIC.

As a result of the instability among certain mid-sized banks, the Federal Reserve posted a term sheet for borrowings through an emergency liquidity facility it has established, named the “Bank Term Funding Program” which will allow eligible institutions to pledge certain types of securities at par value for no-fee loans of up to one year in duration, with interest calculated at the one-year overnight index swap rate plus 10 basis points. Below are additional resources to track developments related to these banking issues.

Government Resources:
Click here to read the joint statement from the US Department of Treasury, FDIC, and Federal Reserve Board.
Click here to read the press release and view the term sheet of the Federal Reserve’s “Bank Term Funding Program.
Click here to stay up to date on the FDIC’s actions in response to the recent bank failures.
Click here to read a statement from SEC Chair Gary Gensler on the Silicon Valley Bank failure.

Law Firm Resources:
Click here to read a Dechert FAQ regarding the Silicon Valley Bank collapse.
Click here to read a Perkins Coie “Founders Insights” post covering Silicon Valley Bank.
Click here to read Morgan Lewis “Silicon Valley Shutdown- What You Need to Know.”
Click here to view Goodwin’s “Knowledge Center” covering developments on Silicon Valley Bank.
Click here to read a client alert from Ropes & Gray on Silicon Valley Bank developments.