Posted on 06/25/2023 7:27:28 PM PDT by TigerClaws
The FDIC has accidentally released a list of companies it bailed out for billions in the Silicon Valley Bank collapse
A document from the Federal Deposit Insurance Corp., which the agency said it mistakenly released unredacted in response to a Bloomberg News Freedom of Information Act request, provides one of the most detailed glimpses yet into the bank’s big customers. BY Lizette Chapman , Jason Leopold , AND Bloomberg June 23, 2023 10:43 AM EDT Silicon Valley Bank headquarters in Santa Clara, California
Silicon Valley Bank headquarters in Santa Clara, California Philip Pacheco/Bloomberg - Getty Images
When federal regulators stepped in to backstop all of Silicon Valley Bank’s deposits, they saved thousands of small tech startups and prevented what could have been a catastrophic blow to a sector that relied heavily on the lender.
But the decision to guarantee all accounts above the $250,000 federal deposit insurance limit also helped bigger companies that were in no real danger. Sequoia Capital, the world’s most prominent venture-capital firm, got covered the $1 billion it had with the lender. Kanzhun Ltd., a Beijing-based tech company that runs mobile recruiting app Boss Zhipin, received a backstop for more than $900 million.
A document from the Federal Deposit Insurance Corp., which the agency said it mistakenly released unredacted in response to a Bloomberg News Freedom of Information Act request, provides one of the most detailed glimpses yet into the bank’s big customers.
The FDIC, which has been selling off pieces of the bank since its failure, asked that Bloomberg destroy and not share the depositor list, saying the agency intended to “partially” withhold some details from the document “because it included confidential commercial or financial information,” according to a letter from an attorney for the regulator. The agency subsequently declined to comment on the substance of the information in the document.
US regulators’ decision to declare a “systemic risk exception” and make all depositors at Silicon Valley Bank whole came after a white-knuckled weekend as tech founders digested SVB’s collapse on Friday, March 10. President Joe Biden described the solution as one that “protects American workers and small businesses, and keeps our financial system safe.”
Treasury Secretary Janet Yellen cast the government’s response — including backstopping all depositors — as necessary. “American households depend on banks to finance their homes, invest in an education, and otherwise improve their standards of living. Businesses borrow from these institutions to start new companies and expand existing ones,” she said at an industry conference the following week before discussing the intervention.
But the decisions that government agencies, including the FDIC, made in a frantic few days after SVB failed were immediately controversial. Some critics said that making all depositors whole at the lender and Signature Bank, which failed March 12, created a moral hazard. A fierce debate is also raging over whether the insurance limit needs to be raised for businesses.
Former Vice President Mike Pence argued that backstopping all depositors amounted to a bailout, a depiction the Biden administration has pushed back against strenuously. Pence blasted the government’s decision to insure all deposits, in part, because the move would cover Chinese companies that did business with the bank.
In May, the FDIC proposed tagging the largest banks with billions of dollars in extra fees to replenish the US government’s bedrock deposit insurance fund after it was tapped to backstop deposits above the $250,000 threshold. At the time, the regulator estimated the decision to cover all depositors at SVB and Signature cost the fund about $15.8 billion.
FDIC Chairman Martin Gruenberg has previously said that at SVB the guarantee to uninsured depositors covered small and midsize business, as well as those with very large balances, and that the bank’s top 10 depositor accounts held $13.3 billion total.
The new document underscores that in addition to serving a legion of startups and fledgling businesses, SVB was a go-to bank for tech industry giants, including some that have kept their relationships with the bank confidential.
The $1 billion that Sequoia, the firm famous for backing iconic companies including Apple, Google and WhatsApp, had at SVB made up a fraction of its $85 billion assets under management. In addition to maintaining its own accounts at the lender, the firm also recommended every startup it backed do the same, Michael Moritz, a partner at the firm, wrote in the Financial Times. A representative for Sequoia declined to comment on the depositor list.
Kanzhun, which had $902.9 million in deposits with SVB according to the document, didn’t respond to multiple emailed requests for comment. The company, which was heavily backed by Chinese giant Tencent before it went public on the Nasdaq in 2021, was among the largest Chinese companies to IPO in the US that year.
Altos Labs Inc., a life sciences startup that works on cell regeneration, had $680.3 million in deposits with the bank. The privately held company has raised $3.27 billion from billionaires including Jeff Bezos and Yuri Milner, as well as Mubadala Investment Company and other investors. An Altos representative declined to comment.
Payments startup Marqeta Inc. had $634.5 million at the bank, according to the document. In a statement, the firm acknowledged that it had “significant deposits” at SVB, but was already in the process of moving money to other banks. “While Marqeta supported the decision to guarantee all deposits at the bank, our ability to execute as a business and meet our financial obligations would not have been impacted, even if it was a longer resolution process” the firm said.
IntraFi Network, which provides deposit services to financial institutions, had $410.9 million worth of deposits at the bank, according to the document. However, in a statement, the firm said that it didn’t actually have any of its own money with the lender, nor was it a client. The amount, rather, represents the funds of almost 2,000 different depositors whose balances were fully insured when SVB collapsed, according to IntraFi.
Crypto stablecoin company Circle Internet Financial Ltd. previously disclosed its SVB deposits, which at the time represented 8.2% of the reserves backing its USD Coin. A spokesman said the company had no additional comment. The USD Coin, which is intended to maintain a 1-to-1 peg to the dollar, briefly drifted from that $1 level on the news of Circle’s exposure. The document listed it as SVB’s biggest depositor with a balance of $3.3 billion.
Streaming set-top box maker Roku Inc. also previously disclosed having roughly 26% of its cash and cash equivalents parked at the bank. The document listed its balance at $420 million. A Roku spokesman declined further comment.
Fintech company Bill.com previously disclosed it had roughly $670 million at the bank. The firm said the amount included about $300 million of its money and $370 million that belonged to customers. A company spokesman declined further comment. The FDIC document listed Bill.com’s total balance at $761.1 million.
Silicon Valley Bank and parent SVB Financial Group Inc. were also listed as having a combined $4.6 billion in deposits. SVB Financial has argued in its bankruptcy case that at least $2 billion in deposits the parent had with the bank should be returned. Federal regulators have said SVB Financial, which declined to comment on the document, must apply to the bank’s receiver for that money.
Biden said he was not going to bail out the capitalist.
Zhoa bai din comes through for his investors
There wasn’t a bailout, they sold off all the assets to repay the bank depositors including those that had over the $250,000 limit. this was discussed and detailed when SVB was closed.
in 2008 we bailed out the following foreign banks-
UBS, Switzerland’s largest bank, was the biggest borrower from the Commercial Paper Funding Facility, tapping the program 11 times for $74.5 billion.
Six European banks were among the top 11 companies that saccumulated the most debt overall — a combined $274.1 billion .
Dexia tapped the US government for $53.5 billion. Other European users included Barclays Plc in London at $38.8 billion; Royal Bank of Scotland Group Plc at $38.5 billion; and Paris-based Natixis at $27 billion.
The Fed listed borrowing for Paris-based BNP Paribas at $41.8 billion.
Commerzbank of Germany borrowed $350 million at the Fed’s discount window.
In these times, there are no coincidences and there are no accidents.
Whether it was a coincidence or accident, no matter... the list of companies was gonna be publicized.
The Great Awakening, aka great Reveal continues.
I haven’t been contacted, but people I worked with 10 years ago have been. Pay rates quoted are $48 an hour, equivalent to a GS-13.
More aid and comfort to the domestic and foreign enemies of the United States. Its in the very nature of the Demonicrats, especially the DeepStaters.
the FED insured and paid the balances before they collected a penny from any sale of assets.
contrasted to the S&L crisis when the nation learned that FDIC investigated and paid out much later unlike SIPC that pays immediately to the limit then investigates.
Silicon Valley Bank had branches in Canada, Israel, Sweden, Denmark, Germany and India. I think most closed.
The FDIC was directed by the Biden Administration to protect their donors. If the companies and donors had gone broke and their companies were viable economic entities, new owners would have taken over. The economy may have hit a bump but within a month, other than the wailing of the elites, things would have moved on.
The banksters own our nation.
Privatize profits with free money from the Fed that my kids will have to pay back and publicize losses. The cherry on top is that Uncle Sugar steps in and allows the big boys (essentially part of the Fed now) to buy good assets for a dime on the dollar. My kids pay for that too.
I think the problem with the S&L crisis was FSLIC was the guarantor in that situation and they were underfunded and couldn't handle the crisis so the FDIC had to step in and figure it all out.
Bkmrk
Oprah had $590+ million saved from loss. What was that amount doing in a “bank” drawing no interest? I believe it was not hers in a sense it was a money laundering operation.
The SVB assets did not cover their obligations (the reason it went under)...the sale of all the assets came up $20 billion short of what the FDIC had to pay out to depositors over $250K....therefore a “bailout” for those (over $250K) depositors.
See 6th paragraph:
https://www.fdic.gov/news/press-releases/2023/pr23023.html
Are there any capitalistS?
Money talks
citizens and the country can walk to Hell
>> The Great Awakening, aka great Reveal continues.
Yeah baby! TRUTH.
Can we handle it?
Some can, some can’t, some won’t.
(Cue that meme of ‘can’t haandle the truth’)
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