Collapsed SVB
Broke bank paid out bonuses at the last minute
3/12/2023 1:24 am
On Wednesday evening, the Silicon Valley Bank (SVB) reported a massive loss, the next day the share on Wall Street slipped into the abyss, US authorities pulled the emergency brake and closed the money house. The annual premiums are said to have been transferred on the day of the closure.
According to a media report, the Californian Silicon Valley Bank (SVB) paid out annual bonuses shortly before its collapse. Eligible employees of the money house received their performance bonuses a few hours before the US government closed them down, writes the US news website Axios. It was about premiums for the year 2022, which should have been paid on March 10th, i.e. on the day the institute was taken over by a bank newly founded by the Federal Deposit Insurance Fund FDIC.
SVB, which specializes in financing tech startups, was shut down by regulators on Friday after its shares posted a record one-day loss on Wall Street on Thursday, wiping out around $80 billion in market values. The previous evening, the money house had reported a loss of $1.8 billion and announced a capital increase to provide new liquidity. Many customers had previously withdrawn their funds as a result of the current woes in the technology sector.
The closure of Silicon Valley Bank also has massive consequences for the crypto industry. Stablecoin provider Circle, which is one of the bank’s clients, parked $3.3 billion at SVB. Overall, the company has reserves of around $40 billion. Users then wanted to exchange the USDC stablecoin issued by Circle for dollars. The token temporarily lost its peg to the dollar as a result, but later recovered most of its losses.