Silicon Valley Bank’s clients received a surprising email from the bank’s new CEO Tim Mayopoulos, assuring them that the institution was open for business as usual. The email came after the FDIC transferred deposits and assets of the former SVB to a newly-created, full-service FDIC-operated ‘bridge bank.’ This was a relief to the tech sector, especially startup founders who were scrambling to make payroll and keep operations running despite the uncertainty of their access to funding.
Mayopoulos, who joined the company as CEO on Monday, said that new deposits, as well as existing ones, are protected by the FDIC in the new bank, called Silicon Valley Bank, N.A. The bank’s website has been restored, but some founders have reported struggling to access their accounts and waiting for wires to officially clear. Mayopoulos is tapping into his experience during the 2008 recession to guide the new bank through the crisis.
SVB’s new CEO wants to restore confidence, and it’s only been days since the bank’s deposits were taken over by regulators and its previous CEO, Greg Becker, stepped down amidst a historical bank run. SVB was seen as the second-biggest US bank failure ever, and its UK arm was acquired by HSBC UK for a symbolic £1, saving it from insolvency.
Mayopoulous shared his prior experience with clients in the email, adding that he’s “very proud of the work we did there to restore the company to profitability and to stabilize the housing finance system in a period of unprecedented challenge.” By resuming US operations, SVB may now have a better chance to convince an institution, whether that’s another bank or private equity firm, to buy its assets – especially after the last attempt to do so failed.
There are still, of course, unanswered questions, including what will happen to SVB’s assets and whether customers will return to the bank. The big questions ahead are what happens to the rest of SVB’s assets, and are founders going to turn back to the institution at the same clip in which they left it? SVB’s new CEO says he wants to restore confidence and support clients and their companies during this difficult time.
Love seeing this note from our new CEO at SVB – thanks Tim Mayopoulos for a clear message: we are open for business and your deposits are protected. https://t.co/E4M0zHXBuE
— Gerald Brady (@gezbrady) March 13, 2023
