FDIC seizes about $2 billion in SVB Financial Group assets, company says

O SVB Financial Group, parent company of Silicon Valley Bank (SVB)announced this Tuesday, the 21st, that it cannot access approximately US$ 2 billion in resources deposited in the bank, after the Federal Deposit Insurance Corporation (FDIC) take control of operations.

Regulators are said to have frozen the company’s accounts while they consider whether it should help with the costs associated with the bank’s failure.

According to lawyers for the parent company, the funds were blocked on Tuesday during the first bankruptcy court hearing.

They also alleged that the FDIC severed communications with SVB Financial and instructed the successor to the Silicon Valley Bank to recover the transfers that the group had made to other bank accounts.

After Silicon Valley Bank was taken over by the FDIC on March 10, regulators directed that all deposits and assets of the bankrupt bank be transferred to a new corporate entity called Silicon Valley Bridge Bank NA.

All depositors at the old bank were allowed to withdraw any funds they had from the new bank’s accounts.

However, the FDIC ordered on March 16 that deposits of around $1.9 billion from SVB Financial be transferred back to an account under the regulator’s control, while it investigated claims it could bring to court against the former parent company of the bankrupt bank.

On Tuesday, lawyers representing the FDIC said they have the legal authority to freeze deposits and subsequently settle any claims they may have against the parent company.

The agency did not disclose how much it spent from its funds to help ensure that all Silicon Valley Bank depositors could withdraw their money. The FDIC did not respond to requests for comment.