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Silicon Valley Bank (SVB) collapse
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The Silicon Valley Bank headquarters in Santa Clara, California, US on Saturday. Photo: Xinhua

Silicon Valley Bank staff offered 45 days of work at 1.5 times salary by regulator FDIC

  • Federal Deposit Insurance Corp, the regulator that took control of the collapsed lender, said workers will be given information about benefits over the weekend
  • Silicon Valley Bank imploded on Friday after depositors, concerned about the lender’s health, rushed to withdraw their deposits

Employees of Silicon Valley Bank (SVB) were offered 45 days of employment at 1.5 times their salary by the Federal Deposit Insurance Corp (FDIC), the regulator that took control of the collapsed lender on Friday, according to an email to staff seen by Reuters.

Workers will be enrolled and given information about benefits over the weekend by the FDIC, and healthcare details will be provided by the former parent company SVB Financial Group, the FDIC wrote in an email late on Friday titled “Employee Retention.” SVB had a workforce of 8,528 at the end of last year.

Staff were told to continue working remotely, except for essential workers and branch employees.

The FDIC did not immediately respond to a request for comment.

Silicon Valley Bank collapses in biggest US bank failure since 2008 crisis

Silicon Valley Bank imploded after depositors, concerned about the lender’s health, rushed to withdraw their deposits. The frenetic two-day run on the bank blindsided observers and stunned markets, wiping out more than US$100 billion in market value for US banks. SVB ranked as the 16th biggest bank in the US at the end of last year, with about US$209 billion in assets and US$175.4 billion in deposits.

“Everyone is working with FDIC to stabilise the situation as quickly as possible,” California Governor Gavin Newsom said in a statement.

The lender’s main office in Santa Clara, California and all of its 17 branches in California and Massachusetts will reopen on Monday, the FDIC said in a statement on Friday.

California Governor Gavin Newsom. Photo: Los Angeles Times / TNS

SVB Securities, a broker-dealer owned by the bank’s former parent group, said on Saturday that its business would not be directly impacted by Silicon Valley Bank’s failure.

Some businesses with holdings at the failed bank are already receiving offers from hedge funds to buy their stranded deposits for as little as 60 cents on the dollar, news website Semafor reported on Saturday, citing people familiar with the matter.

Bids range from 60 to 80 cents on the dollar, the report said, adding that the range reflects expectations for how much of the uninsured deposits will be eventually recovered once the bank’s assets are sold or wound down.

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