Article prepared by and republished courtesy of our colleagues Richard Marks, Kevin Criddle, Curtis Mo, and Jeffrey Lehrer; originally published here: https://www.dlapiper.com/en/insights/publications/2023/03/applying-the-lessons-of-the-svb-and-signature-bank-failures
The failures of Silicon Valley Bank and Signature Bank sent many companies into credit and liquidity crises. With the most pressing short-term impacts now stabilized, corporate boards and management should consider steps to be better prepared in the future.
On March 10, 2023, Silicon Valley Bank (SVB) was closed by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. Two days later, New York regulators stepped in to close Signature Bank under the same structure. On March 12, 2023, the Federal Reserve, FDIC and Treasury Department jointly announced an emergency program to backstop all deposits at both SVB and Signature Bank.