Silicon Valley Bank: Collapsed US lender bought by rival

First Citizens BancShares has acquired the assets and loans of Silicon Valley Bank (SVB), which had collapsed earlier this month, leading to concerns about the stability of other lenders worldwide. This triggered a decline in bank shares globally, with Credit Suisse, a Swiss banking giant, being acquired by UBS due to worries over its strength. Investor nerves have continued, resulting in a significant drop in bank shares on Friday. SVB was taken over by US regulators following a bank run, and Signature Bank subsequently failed shortly afterward. These two failures represent the largest US bank collapses since the 2008 financial crisis.
Silicon Valley Bank: Collapsed US lender bought by rival
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Under the SVB takeover deal, announced by the US Federal Deposit Insurance Corporation (FDIC), all 17 former SVB branches will open under the First Citizens brand on Monday.

SVB customers are being advised to continue using their current branch until they receive notice from First Citizens Bank that their account has been fully moved across.

First Citizens is based in Raleigh, North Carolina and calls itself America's biggest family-controlled bank. It has been one of the largest buyers of troubled banks in recent years.

It has bought around $72bn of SVB's assets and loans at a discount of $16.5bn. The FDIC will still hold about $90bn of SVB's assets.

The UK arm of SVB was bought by HSBC earlier this month for £1.

Threat of rising rates

Interest rates were cut sharply during the 2008 global financial crisis and again during the Covid pandemic as central banks around the world sought to encourage economic growth.

But rates have been rising over the past year as central banks try to rein in soaring prices.

These rate rises have hit the value of investments that banks keep some of their money in, and contributed to the bank failures in the US.

The worry that has unnerved financial markets is that there could be other problems in the banking sector, which have not yet emerged.

Central banks around the world have stressed that the banking system is safe and lenders are well capitalised.

Sarah Hewin, head of Europe & Americas research at Standard Chartered bank, told the BBC's Today programme that there is a "very febrile environment" among investors.

"At the moment there's a lot of psychology rather than reality which is running markets."