New Delhi: Former Fannie Mae CEO Tim Mayopoulos was hired Monday by the Federal Deposit Insurance Corporation to lead the Silicon Valley bank, a division of the now-defunct SVB Financial Group. The startup-focused lender was shut down by regulators on Friday, left with a capital shortfall after a run on its deposits.
Prior to joining Fintech Blend, Myopoulos spent more than six years as the CEO of mortgage financier Fannie Mae. The SVB failure, the biggest bank failure since the 2008 financial crisis, has decimated stocks and raised concerns about global market contagion. ,Also read: HSBC buys UK division of Silicon Valley Bank,
The sale of a $21 billion portfolio of available-for-sale securities last week, resulting in a loss of $1.8 billion and a sharp drop in deposits, prevented the bank from raising capital to cover the shortfall. ,ALSO READ: Signature Bank second lender to fail in last three days, third largest bank failure in US history,
In addition, the regulator has transferred almost all the assets of the bank, including all insured and uninsured deposits, to the recently established bridge bank.
For the uninitiated, HSBC bought the firm’s UK division once the Silicon Valley bank went under, leaving behind billions of dollars in deposits. Following consultations with the Prudential Regulation Authority (PRA), HM Treasury (HMT) and the Financial Conduct Authority (HMT), the Bank of England announced in a statement on Monday that the UK arm of the Silicon Valley bank will be sold to HSBC UK Bank Plc. Will go FCA).
The FCA and PRA have given their approval to HSBC. According to the UK’s central bank, the measures were taken to support financial system confidence, stabilize SVBUK, ensure continuity of banking services and minimize damage to the UK technology sector.
South West Surrey MP Jeremy Hunt addressed the situation on Twitter “This morning, the private sale of Silicon Valley bank UK to HSBC was made possible by the government and the Bank of England. Deposits will be protected without taxpayer help. I yesterday told IT We promised to protect the region, and we are working hard to keep that promise.”
The result comes after the Federal Deposit Insurance Corporation shut down the startup-focused Silicon Valley bank Friday after California banking authorities designated it to take control of the lender’s deposits. The last bank to be insured by the Federal Deposit Insurance Corporation was in October of 2020, and SVB is the first to do so in more than two years.