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In a bid to find a buyer for failed Silicon Valley Bank, the US Federal Deposit Insurance Corp (FDIC) tapped investment bank Piper Sandler Companies. The investment bank will relaunch the auction of SVB, reported news agency Reuters on Wednesday quoting its source.
The concerted effort to sell off SVB comes after regulators took it over last Friday and agreed on Sunday to guarantee all of its deposits. The FDIC had failed to find a buyer last weekend after major banks pulled back from carrying out such a risky deal in such a short time. The FDIC is aiming to sell SVB in its entirety but also explore piecemeal deals, the report quoted its source as saying.
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The parent of Silicon Valley Bank, SVB Financial Group, on Monday said it was separately exploring options for its other assets, which include an investment bank and an investment business.
Meanwhile, US President Joseph Biden stated that taxpayers’ money would not be used to salvage SVB because any capital shortfalls would be covered by a government fund that could place a levy on other banks. In such a state, a successful sale of SVB by the FDIC would help reduce such shortfalls.
SVB became the largest US bank to fail since the 2008 financial crisis, sparking concerns across the banking sector and raising doubts about the future of startups that turned on the technology-focused lender for new debt financing.
Of those banks that studied the feasibility but decided against an offer during last weekend’s auction for SVB were PNC Financial Services and Royal Bank of Canada, which owns California-focused lender City National Bank, Reuters has reported.
The Treasury Department, Federal Reserve, and Federal Deposit Insurance Corp initiated measures following the collapse of the SVB to shore up confidence in the financial system.
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