The boss of the bank created with the assets of SVB calls on customers to return

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The boss of the bank created with SVB assets calls on clients to come back

The SVB bank could no longer cope with the massive withdrawals of its customers, mainly technology players.

The boss of Silicon Valley Bridge Bank, the entity created by US regulators to succeed Silicon Valley Bank (SVB) after its bankruptcy, on Tuesday called on customers to bring their deposits back into the organization at the time where the big American banks see customers flocking.

SVB, which became insolvent after massive customer withdrawals, was placed under the control of the authorities on Friday, who entrusted management at the American agency responsible for guaranteeing deposits (FDIC).

We are doing everything in our power to rebuild, regain your trust and continue to support the innovation economy, wrote in a message Tim Mayopoulos, appointed head of the new establishment by the FDIC on Monday. .

The bank is in the process of restarting its various systems, granting new loans and honoring existing credit solutions, he said.

The first thing you can do to support the future of this institution is to help us rebuild our deposit base, both by leaving deposits with Silicon Valley Bridge Bank and by transferring deposits that have gone over the past few days, he pleaded.

Friday's SVB default, the biggest U.S. bank failure since 2008, was preceded on Wednesday by the liquidation of Silvergate Bank, a small regional bank that has become a favorite destination for the cryptocurrency community, and has was followed by the forced closure on Sunday of Signature Bank, the country's 21st largest bank.

The situation is benefiting the biggest banks like JPMorgan Chase and Bank of America, which have seen an influx of customers and deposits over the past few days, according to two industry sources.

These establishments are not actively seeking new customers from competitors given the context, said the two sources. But they welcome customers from closed banks, which represents high amounts, one of them pointed out.

Customers from small and medium banks have also probably transferred all or part of their funds to major players that the government will not be able, in their eyes, to let fail, suggests Alexander Yokum, who analyzes regional banks for the firm CFRA.

Departures should, however, depend on the banks, the composition of their clientele or their regional presence, he believes.

The extent of the movements will probably only be known when the banks will publish their quarterly results, in April, or if they publish an interim report by then, stresses Alexander Yokum.

In a note, ratings agency S&P Global Ratings said it had seen no evidence that runaway deposit outflows recorded at a few banks had spread widely to others. /p>

We believe that the emergency measures announced by the Federal Reserve (Sunday) have provided banks with additional sources of liquidity when needed and have probably also reduced the chances that the issue of trust will become a problem for a large number of banks, it is added.

On Thursday alone, SVB had received some $42 billion in withdrawal orders from customers alarmed by the bank's desire to quickly bail out its liquidity, raising capital and selling financial securities with a loss of $1.8 billion.

The FDIC has guaranteed that all customers of the bank before filing for bankruptcy would have access to all of their funds, including beyond the usual $250,000 limit.

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