Tech Gadget Central Latest Tech News and Reviews
Late on Monday night, Silicon Valley Bank’s customers unexpectedly got an email in their inboxes from the bank’s new CEO, Tim Mayopoulos, claiming that the institution was not only open but also conducting business as usual.
The email, which TechCrunch got from various sources, stated that Silicon Valley Bank, N.A. was open and operating normally. The SVB website has since been fixed as of the time of posting. But other founders tell TechCrunch that they are having trouble logging into their accounts and that they are still awaiting the official clearing of wires.
The new bank, Silicon Valley Bank, N.A., is insured by the FDIC, according to Mayopoulos, who started working for the corporation as CEO on Monday.
According to the email, the FDIC moved deposits and assets of the previous SVB “to a newly-created, full-service FDIC-operated ‘bridge bank,'” which explains the unexpected comeback of SVB. “Any wire transfers made on March 9 or 10 that had not yet been processed have been canceled. You must restart those transactions if you want to complete them.
In the meantime, Mayopoulous is using his knowledge of the 2008 recession to help the fledgling bank get through these difficult times.
In 2008, the executive worked for mortgage financier Fannie Mae as a member of the executive suite. Later, he became the company’s CEO. He most recently served as Blend’s president, a company that provides software to the consumer banking sector. In the email, Mayopoulous mentioned his previous client interactions and said he was “extremely proud of the job we accomplished there to restore the company to profitability and to stabilize the home financing sector in a period of extraordinary challenge.”
Just days after the bank’s accounts were seized by regulators and its former CEO, Greg Becker, resigned after a record bank run, SVB’s new CEO says he wants to rebuild confidence. SVB was regarded as the second-largest bank failure in US history. It was saved from bankruptcy when HSBC UK purchased its UK division for a symbolic $1.
The tech industry, notably startup founders who have been struggling to pay employees and maintain operations despite uncertainties about their access to finance, benefited from regulatory action.
The email concludes, “We aim to regain your trust and support you and your businesses at this time.” The most recent notification from the FDIC said that senior management has left the bank and verified SVB’s new course.
SVB may have a better chance of getting a bank or private equity firm to buy its assets if it starts doing business in the United States. This is especially true since the last time it tried to do this, it failed.Of course, there are still outstanding issues, such as what will happen to SVB’s assets and whether or not consumers will visit the bank again.
The big uncertainties that lie ahead are what will happen to the remaining SVB assets and whether or not the founders will return to the organization at the same rate that they departed it.
Love seeing this note from our new CEO at SVB – thanks Tim Mayopoulos for a clear message: we are open for business and your deposits are protected. https://t.co/E4M0zHXBuE
— Gerald Brady (@gezbrady) March 13, 2023
