How officials, investors and funds are tackling the SVB collapse

SVB became the biggest US lender to fail in more than a decade on Friday, after a tumultuous week that saw an unsuccessful attempt to raise capital and a cash exodus from the startups that fueled its rise.

Americas:

US

• The FDIC and the Federal Reserve are weighing creating a fund that would allow the regulators to backstop more deposits at banks that run into trouble following SVB’scollapse, according to people familiar with the matter.
• US regulators overseeing the emergency breakup of SVB Financial Group are racing to sell assets and make a portion of clients’ uninsured deposits available as soon as Monday, according to people with knowledge of the situation. The initial payout — the amount of which is still being determined — would aim to tide over the firm’s distressed customers, with more cash to follow as the bank’s assets are sold.
• The FDIC on Saturday queried officials from multiple small- and mid-sized lenders, including First Republic Bank, about their financial situations, according to people with knowledge of the conversations.
• Khosla Ventures sent an email to founders saying that the venture capital firm would step in and cover payroll for some of its portfolio companies if they had shortfalls because of funds tied up with SVB.

Canada

• SVB Financial Group’s unit in the country reported C$435 million ($314 million) in secured loans last year, double the C$212 million a year earlier, regulatory filings show. Its customers include e-commerce software provider Shopify Inc. and pharmaceutical company HLS Therapeutics Inc., according to a previous statement by the bank.

Europe:

Germany

• German financial regulator BaFin said it has the current developments “in view” and is “reflecting them in our continuing supervision.”
• SVB Germany’s latest financial disclosure for 2021 states that it is a “small, non-complex” institution not subject to capital requirements because of reliance on the parent company for capital and liquidity.

UK

• SVB’s unit is set to be declared insolvent, has already ceased trading and is no longer taking new customers. On Saturday, the leaders of roughly 180 tech companies sent a letter calling on UK Chancellor Jeremy Hunt to intervene.
• The UK government “will bring forward very soon plans to make sure people are able to meet their cash flow requirements, pay their staff,” Hunt told Sky News on Sunday. He had pledged to ensure the short-term operational needs of SVB UK customers, and said that longer-term support is also planned.
• The UK Treasury has begun canvassing startups, asking how much they have on deposit, their approximate cash burn and their access to banking facilities at SVB and beyond, according to people familiar with the matter.

Asia:

China

• SVB’s joint venture in China, SPD Silicon Valley Bank Co., sought to calm local clients by reminding them that operations have been independent and stable. It said it has always operated in accordance with Chinese laws and regulations with a standard governance framework and independent balance sheet The venture between Shanghai Pudong Development Bank and SVB was founded in 2012 as the first tech-focused bank in China, and serves science and innovation enterprises.

Kuwait

• Kuwait’s central bank says local lenders have very little exposure to SVB.

South Korea

• Top South Korea officials met over the weekend and said they will closely watch for signs of impact on its financial markets and economy from the collapse of SVB. The finance minister, regulators and central bank officials were among those at the meeting. The possibility of higher volatility and uncertainties can’t be ruled out, though most officials agreed it won’t likely develop into a systemic risk. The situation calls for round-the-clock monitoring and prompt response, the finance ministry said in a statement.

Asian Funds

• Asia’s biggest funds including Sequoia Capital China, Temasek Holdings Pte, ZhenFund and Yunfeng Capital reached out to their portfolio companies to gauge how much exposure they have to SVB, according to people familair.
• A Sequoia Capital China representative said the company couldn’t immediately comment, while ZhenFund didn’t respond to a request for comment during non-business hours. Temasek said it doesn’t have any direct exposure to SVB. Yunfeng said it notified teams to do a quick internal inquiry into potential exposure to SVB and warned portfolio companies to take action to avoid risk. Yunfeng itself doesn’t have deposits with SVB.