As the government seeks a buyer for it, newly christened Silicon Valley Bridge Bank is once again the darling of the tech elite.
When SVB depositors tried to move to those institutions during the panic they found that minimum deposits as high as $20 million were restrictive and response times were slower than they were used to at tech-savvy SVB.
In addition to better client service experiences, Silicon Valley Bank is one of the only options startups have to access credit lines. The bank spent years building relationships in the valley to assess credit worthiness of startups and predict the reliability of their venture backers to step in with cash if needed. Early-stage startups simply are not eligible for credit lines at the many banks which prefer five or even 10 years of financial history for a debt applicant.
As the new SVB gathers deposits and confronts its future, there is grumbling among community banks about the manner of its rescue. SVB and crypto-focused Signature Bank, which also suffered a run, were supported after being defined as important to the U.S.by the Treasury, Federal Reserve, and FDIC. Any losses incurred to support uninsured deposits at the two banks will be covered by the Deposit Insurance Fund, an account used to repay depositors when a bank fails.
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