Explore More
The new government-appointed head of Silicon Valley Bank on Tuesday urged deep-pocketed venture capitalists to stash their cash there — saying there’s “no safer place” despite last week’s collapse of the nation’s 16th-largest bank, a report said.
“I’m not asking you to do this as an act of charity,” interim CEO Tim Mayopoulos said during a morning Zoom call, according to the business website The Information.
Mayoupoulos told listeners to either leave their money on deposit at the bank or return recent withdrawals, the website said, citing a person with direct knowledge of the call.
“There is no safer place,” Mayopoulous reportedly said.
Referring to the bank’s estimated $6.7 billion worth of venture-related debt issued last year to early- and mid-stage startups, Mayopoulos said, “Those arrangements are in place, and we will honor them,” according to The Information.
The Federal Deposit Insurance Corporation named Mayopoulos to lead the new “bridge bank,” Silicon Valley Bank N.A., on Monday after shuttering its predecessor Friday in a move that sparked fears of a looming economic meltdown.
A bridge bank is a temporary institution that has been authorized by a financial regulator to operate a failed or insolvent bank until a buyer is found or the bank’s assets are liquidated, according to Investopedia.
The FDIC transferred all deposits of the defunct bank’s parent company SVB Financial Group to Silicon Valley Bank N.A.
The moves came after President Biden signed off Sunday on a controversial plan by the Treasury Department, Federal Reserve, and FDIC to pay back all customers in full, even if their deposits exceeded the statutory $250,000 maximum.
Mayopoulos, who succeeded former CEO Greg Becker, sent clients a lengthy email Monday to say that the bank was open and operating normally, according to Reuters.
“Silicon Valley Bank, N.A. is open and conducting business as usual. We are here to serve you,” wrote Mayopoulos, the former head of Fannie Mae.
“I recognize the past few days have been an extremely challenging time for our clients and our employees, and we are grateful for the support of the amazing community we serve. I have joined the company as CEO starting today,” he wrote.
Mayopoulos explained that the FDIC has “transferred all deposits and substantially all assets of the former Silicon Valley Bank to a newly created, full-service FDIC-operated ‘bridge bank’ in an action designed to protect all depositors of Silicon Valley Bank.”
He assured depositors that they “have full access to their money.”
“I come to this role with humility. I also come to this role with experience in these kinds of situations. I was part of the new leadership team that joined Fannie Mae in the wake of the financial crisis in 2008-09, and I served as the CEO of Fannie Mae from 2012-18,” he wrote.
Mayopoulos also noted that he served as president of a Silicon Valley-based software firm “that provides technology to financial institutions to serve their consumer banking customers.”
“I know how important Silicon Valley Bank has been and continues to be to the success of its clients and the innovation ecosystem,” he wrote.
“We look to restore your confidence and support you and your companies at this time,” the CEO added.
Silicon Valley Bank executive Gerald Brady praised Mayopoulos for the email.
“Love seeing this note from our new CEO at SVB — thanks Tim Mayopoulos for a clear message: we are open for business and your deposits are protected,” he said in a tweet.
The failure of Silicon Valley Bank was the second-largest in US history after Washington Mutual collapsed during the 2008 economic crisis.
ncG1vNJzZmimqaW8tMCNnKamZ2Jlf3R7j2xmamxfqLattcKopWaukaG5psWMm5ino12YvK%2Bw1JyroqaXYq%2B2v8innKyrXZbAbsHSrpilZZ6axG6vxKhkrJmpqHw%3D