Reuters on Wednesday reported that regulators at the FDIC have asked interested banks in acquiring SVB and Signature Bank to submit bids by March 17. A weekend action launched by the FDIC to sell SVB failed last Sunday after major banks balked at carrying out such a risky deal in a short amount of time. SVB Financial Group , the parent company of Silicon Valley Bank, earlier on Friday filed for a court-supervised reorganization under Chapter 11 bankruptcy protection. (Reporting by Kanjyik Ghosh in Bengaluru; Additional reporting by Urvi Dugar and Akriti Sharma; Editing by Lincoln Feast)
(Recasts with changed sourcing)
By Kanjyik Ghosh
March 17 (Reuters) - U.S. regulators are considering
retaining ownership of securities owned by Signature Bank and Silicon Valley Bank to allow smaller banks
to participate in auction for the collapsed lenders, a source
familiar with the matter said on Friday.
The move by Federal Deposit Insurance Corp (FDIC) is aimed
at facilitating takeovers of the banks and to widen the pool of
bidders, while ensuring that larger banks are not discouraged
from bidding, the source said.
Many of the fixed income securities that SVB and Signature
Bank invested in, such as Treasuries, have been worth less since
the Federal Reserve raised interest rates. The FDIC retaining
those securities would ensure that acquirers do not have to book
a loss on them.
Signature Bank and Silicon Valley Bank did not immediately
respond to Reuters requests for comment. The FDIC declined to
comment.
Bloomberg News first reported the move on Friday and said
that the amount covered at Signature could range from $20
billion to $50 billion, while for Silicon Valley Bank it could
be between $60 billion and $120 billion.
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