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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.
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)
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