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U.S. regulators willing to share losses for sale of SVB, Signature Bank - FT

Stock Markets Mar 17, 2023 04:42PM ET
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2/2 © Reuters. FILE PHOTO: A notice hangs on the door of Silicon Valley Bank (SVB) located in San Francisco, California, U.S. March 10, 2023. REUTERS/Krystal Hu/File Photo 2/2
 
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(Reuters) - U.S. regulators are willing to consider the prospect of the government backstopping losses at Silicon Valley Bank and Signature Bank (NASDAQ:SBNY) if it helps push through a sale, the Financial Times reported on Friday, citing people briefed on the matter.

Sources told Reuters on Wednesday that regulators at the U.S. Federal Deposit Insurance Corp (FDIC) have asked banks interested in acquiring failed lenders SVB and Signature Bank to submit bids by March 17.

However, the FDIC has not given bidders any indication of the size of losses it would be willing to backstop or any sense of how the arrangement would be structured, the people told the Financial Times.

The FDIC did not comment on the Financial Times report.

A weekend action launched by the FDIC to sell SVB failed on Sunday after major banks balked at carrying out such a risky deal in a short amount of time.

The lack of interest was in part because the agency was unwilling to discuss the possibility of shouldering any losses on the lenders' assets, one of the people told the Financial Times.

A sale of either SVB or Signature could trigger immediate losses because the new buyer would have to mark down the price of some assets to reflect their current market value, the report said.

The Financial Times said Blackstone Group (NYSE:BX) and Apollo Global Management (NYSE:APO) have expressed interest in buying parts of SVB's loan book.

However, the FDIC is only willing to take bids from banks for the whole SVB commercial bank, including loans and deposits, the report added, citing people involved in the process.

SVB Financial Group, the parent company of Silicon Valley Bank, earlier on Friday filed for a court-supervised reorganization under Chapter 11 bankruptcy protection.

U.S. regulators willing to share losses for sale of SVB, Signature Bank - FT
 

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Comments (2)
B L
B L Mar 17, 2023 4:26PM ET
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political hot potato. who wants to be seen bailing out banks (again) in an election cycle. would NOT keep a penny in a bank that's not TOP 3, with or without fdic
Roger Miller
Roger Miller Mar 17, 2023 4:12PM ET
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I guess the government money and taxpayer money is two separate things according to Biden since he said there would be no cost to the taxpayer.  This banking crisis is just one more casualty of the politicians and bureaucrats ill conceived pandemic policies.  Many were warning that shutting down the economy would not end well, but they were ignored by authoritarian politicians and their economic illiterate followers.
 
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