Feds seize Silicon Valley Bank's assets
federal regulators have seized the assets of Silicon Valley Bank, marking the largest bank failure since the 2008 financial crisis. The collapse is the second largest in U.S. history and is now raising concerns about the economy. CBS2's Bradley Blackburn has more and he joins us live from the newsroom. Bradley. Doug Andrea, the ripple effects are wide.
This bank has a branch over on Park Avenue, but the biggest effects this morning are being felt in Silicon Valley. This bank has grown over 40 years right along with the tech industry and now many of those companies have been left out in the cold. The sudden collapse of Silicon Valley Bank had tech CEOs and founders standing outside bank branches looking for answers about their funds. I'm pretty concerned. You're all here and things are locked up. It's very difficult to operate your company. The country's 16th largest bank with more than 200 billion dollars in assets was shut down by regulators yesterday due to inadequate liquidity and insolvency.
The bank was squeezed by rising interest rates and shrinking deposits from tech clients. The Treasury Secretary reacted on Capitol Hill. When banks experience financial losses, it is and should be a matter of concern. The FDIC ensures accounts up to $250,000, but many clients have far larger deposits that they now can't access. We wired out the money yesterday, but Silicon Valley Bank did not honor our wire. Stefan Kalb, CEO of a Seattle based tech startup is concerned for his company and the wider economy. We can't pay our vendors today.
What happens when tens of thousands of companies can't pay their vendors anymore because they don't have the cash in the bank. Stocks were down on the news with investors fearing more financial instability. Washington, the White House worked to calm concerns. Our banking system is fundamentally different because of the changes that we put in place in 2008. For example, they have to hold more capital. They undergo stress tests. So we know that we had to build more resilience.
The FDIC says insured deposits will be available by Monday when Silicon Valley Bank reopens for business. And as for uninsured deposits of more than $250,000, the FDIC says that account holders will get some funds within the next week and a receiving certificate for the remainder of their deposits. Doug, Andrea, some tech leaders are already asking for a federal bailout. Bradley Blackburn live in the newsroom. Bradley, thank you.
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