U.S. regulators have shut down the troubled Silicon Valley Bank, after the lender forecast higher-than-expected decline in deposits and lost $1.8 billion in bonds.
The California Department of Financial Protection and Innovation and FDIC closed the bank, transferring all insured deposits to a newly created deposit insurance entity. Customers with accounts in excess of $250,000 were urged to contact the FDIC.
Silicon Valley Bank pioneered the startup banking industry and claimed nearly half of all American venture-backed tech and life-sciences companies as clients.
Semafor reported Friday that tech industry founders got emails from their venture capital investors urging them to move their money out of the bank; SVB’s chief executive had told clients to “stay calm.”
The bank had 17 branches in California and Massachusetts; they are expected to reopen on Monday for customers to retain access to their insured funds.